PROFIT BusinessCast

The guest on this week’s BusinessCast has learned how to sell to giants. His name is Ron Cihocki, a wireless veteran who is now country manager of movie rental kiosk firm RedBox Canada. RedBox has been extremely successful in the U.S., and it’s Cihocki’s job to do the same in Canada. Today, the company has 1,400 kiosks across the country, in all 10 provinces, in such retailers as Loblaw’s, Sobeys and Shopper’s Drug Mart.

In his quest to get the kiosks into such marquee retailers, Cihocki has learned some valuable lessons about what it takes to negotiate, and win over, large corporate chains. Here are his three top tips:

1. Build the brand

When Cihocki first started trying to get kiosks into Canadian retailers, awareness of the RedBox brand was very low in Canada. “That was something we worked on very hard through promotional activities and in social and traditional media,” he says. “We’d talk to the retailers about the success story the business had been in the U.S., and what it could mean for them and their businesses.”

2. Sell the benefits

“Obviously, we share some of the revenue with them,” Cihocki says. But that’s not really the value we brings to the table for them. The value is the traffic we drive to their stores. Once it becomes a habitual behaviour for the consumer, they’ll go to the store to get their RedBox movie and then make purchases they hadn’t planned to. We were able to show them those trends and numbers frm the U.S.” Being able to offer a corporation something so valuable made negotiations much easier, he says—especially since he had proven data to back up his promises.

3. Make it no-risk

Large corporations are usually deathly allergic to risk, so it’s smart to make your offer as easy and risk-free for them as possible, says Cihocki. “We put the capital in, we put the machine there, we look after it and service it,” he says. “It’s a no-risk proposition for them.”

Online shoppers aren't known for being particularly afraid to hurt a brand's feelings. If they're unhappy with the service they receive, they'll more often than not let you—and the internet as a whole—know about it. Which is why the most successful online vendors have rigorous customer service strategies in place.

One of them is Antoine Viel, internet sales manager at Direct Music Sales, which sells musical instruments through a storefront in Quebec City and an award-winning eBay site. Viel was recently named the 2014 eBay Canada All Star Entrepreneur, and for good reason. In the past 12 months, his eBay page has received 259 positive ratings from customers—and only one negative.

Viel opened the eBay store when he started to note an increase in showrooming—that is, potential buyers testing out his wares in store, then leaving to purchase it from someone else online. He's gone on to embrace the online medium. In fact, sales have increased dramatically since he did so.

Read: 4 Ways to Turn Showroomers into Paying Customers

So, what does it take to produce such happy online customers? Viel has three main recommendations:

1. Be flexible

"The biggest challenge of selling on a platform like eBay is that you're selling in a global marketplace," Viel explains. That means that if a buyer is interested in purchasing a guitar at 2:00 in the morning and wants an answer to a question, a seller based in another time zone might have the advantage. That's why Viel and his team have embraced a 24/7 approach to managing the site, so that every querry can be addressed as quickly as possible. "I'm always working on and off. I'm very comfortable with that," he says. "I was working as a musician before, so I'm used to working flexible hours."

2. Don't sell what everyone else is selling

Key to Viel's success has been stocking things that aren't easily available from other sellers. Along with new instruments, his store sells unique items, such as demos and used instruments. That gives Direct Music an edge: "People are going on eBay to either get a very good price or something very unique."

Viel also insists on keeping the bricks-and-mortar storefront, which he considers another unique advantage. Local buyers will often purchase through the eBay site, but then opt to pick their instrument up in the store. That starts a relationship that can yield big returns when the buyer needs an instrument repaired or serviced. "People buy online, but they come back to us after doing it," he says.

3. Give buyers an excellent experience

In the ruthlessly competitive online marketplace, the little things matter. That includes presentation; Direct Sales likes to maintain a professional-looking, easy-to-navigate user interface on its eBay site. The company maintains a very buyer-friendly returns policy, which allows people to return their purchases within a month of buying them with little hassle. And Viel insists that his team takes care of the logistical details that make a world of difference to the buyer: every instrument is meticulously packaged to ensure safe shipping, and each address is double-checked to allow for on-time delivery.

The voice of the guest of this week's podcast is a familiar one: it's that of Andrew Brown, president of business writing and communications consultancy Write On The Money, and the former co-host of the PROFIT BusinessCast.

Brown dropped in to the BusinessCast studio to talk about an issue that is crucial for entrepreneurs and business leaders alike (especially those involved in business development): making a good first impression on the people you meet.

"First impressions are something that either set a wonderful tone for relationships, or they plague us, they come back to haunt us in our business and professional lives," Brown says. "You have only between five and 30 seconds to make an difference. It's hard-wired in the human brain to assess a person in those first few seconds of meeting them… And in most cases, an unfavourable first impression is enough to cause us to not bother to look more deeply at a person, a product or a company."

But good first impressions aren't necessarily made of what you think they might be. Yes, it helps to be friendly, clever and/or funny, Brown says. But there are more potent elements at play. Here is his list of the three things that make for a really great first impression:

1. It stirs up an emotion

…And, hopefully, a positive one. "It's too easy to forget that emotion plays a huge part in business success," says Brown. "There's an old adage that people buy on emotion, justify with reason. Well, that happens on a personal basis, as well as on a product or company level."

2. It must be memorable

"A good first impression should be unique, and, ideally, short," says Brown. "Quite frankly, people don't remember an abundance of technical information from an initial interaction." In a world in which people are inundated with advertising, email, social media and other people, they'll only spend a few seconds assessing whatever or whomever it is they're encountering: "The message really has to be memorable and concise."

3. It has to accurately reflect who you are

"If the first impression shapes how and when people come to deal with you, and whether they will or won't engage with you, authenticity is absolutely critical," Brown explains. It comes down to "knowing what is really true about your business," he adds. This is essentially another application of the elevator pitch principle. "You must be able to articulate what is core and unique about what you do and the value you provide," he says. "This is not something that's done overnight; it takes time to boil down what is truly you in a very short and succinct way."

It's a truth not often acknowledged that the sale of a business is not always the happily-ever-after tale it ought to be. In fact, in too many cases, both the seller and the buyer are left dissatisfied, unhappy and, sometimes, financially bereft.

It's something Jordan Dolgin sees all the time. As principal of Toronto-based business law firm Dolgin Professional Corp., he's been involved in many successful deals—but also many that have gone awry. Why do things go so wrong? "In some cases, it's a failure to close the deal," he says. "In other cases, the deal closes, but there's a failure to get the benefits the parties wanted. Failure can come in different ways."

In this week's PROFIT BusinessCast, Dolgin shares three of the biggest reasons why business deals fall through, either before the ink is signed or after:

1. The participants are unprepared

Often, neither the buyer nor the seller are fully prepared for the finer points of a transaction. And that can create major problems, according to Dolgin. "Lots of deals will have working capital adjustments," he explains. "Buyers will pay full value, and will want the sellers to leave behind enough working capital to finance the business. A lot of smaller clients have ‘notice to reader' financials, and have no idea what GAAP would do with those. By not running through some scenarios before closing, they almost close blindly. After closing, when they have an audit of those closing numbers, and they get put through a working capital reconciliation, often the sellers can lose a big chunk of the purchase price. Then you get into major disputes." It's incumbent on sellers, he adds, to make sure they really understand what the deal will do to the numbers.

2. The seller can't adjust to life on a payroll

Many acquisitions of entrepreneurial companies include clauses that require the CEO—who, in most cases, was the driving force behind the firm's success—to sign a contract to work for the acquiring firm. Sometimes these contracts are very short; sometimes they can last years. Whatever the term, they often are disastrous for all involved. Why? "A lot of entrepreneurs make horrible employees. That's why they're entrepreneurs," says Dolgin. "They're totally ill-prepared for life as an employee." This can manifest in many negative things, including angry outbursts and poor performance that can sometimes sabotage the deal, depending on the conditions.

3. Emotions get in the way

This is especially true of inter-generational transfers of family businesses. Success in this area depends on many things, says Dolgin. "Number one is the personality and the competence of the kids. If they've been out of school for a while and have been working on the business for many years, it can work very well. In some families the kids end up in the business, but they're really not contributing. They're not qualified to run the business. Those tend to fail."

"I think a lot of investment firms, venture capitalists and growth equity firms maybe don't always understand what a difficult time it is to run a business."

So says Simon Chong, co-founder and a managing partner, Georgian Partners, an equity firm that invests in digital, internet and ecommerce companies.

Today's business climate is one of incredibly rapid change, Chong says: "When you look at what's happening today with cloud, mobile, social and the ‘internet of things,' this change creates masses of data, the likes of which we've never thought of before." And that's breeding unprecedented opportunities for the companies that can exploit it, especially in areas such as business process improvements based on applied analytics.

Chong has a solid understanding of what it takes to run a business, having built and sold a successful tech firm in the late 1990s before co-founding his current business. He believes it's essential that investors have empathy for the life of the entrepreneur. Imperative to that, he believes, is having a firm understanding of what it really takes to run an innovative business.

In Chong's view, truly innovative companies today require three main things:

1. Talent (no matter where it comes from)

According to Chong, smart companies today look less at credentials and degrees, and more at the quality of ideas—especially in tech. "The key thing around digital industries is that they generally are meritocracies," he says. "People will say ‘I have this great idea.' It doesn't matter where they came from or if they went to a certain business school." He believes that companies that harness this energy are the ones that get ahead.

2. Money

It's no secret that innovative businesses need money to grow. Thankfully, there's a lot of it available for tech companies today, Chong says: "In Canada, we now have pretty good capital pools able to fund great ideas," he says. And the scenario is only improving: "I think now we're starting to see more and more that companies can get funded from seed to growth equity," he says.

3. More women

Chong is one of many who'd like to see more women in science and tech; he believes women add intuitiveness and a different thought process that greatly enhances the innovation of the companies they work for. "Most companies have engineering companies that are mainly male," he says. "If you look at the data on science, tech, engineering and math graduates going into the job field, it doesn't support the 50/50 split of the population." How to fix the situation? Chong believes it comes down to better promotion of the opportunities in STEM careers at an early age; programs like Ladies Learning Code and Girls Learning Code are a great start, he says.

What does it take to thrive as an entrepreneur? Motivational speaker, author and entrepreneur Stuart Knight, president of Stuart Knight Productions Inc., has spoken to thousands of business-owners over his 20-year career. It's taught him a thing or two about what really makes an entrepreneur successful.

In this week's BusinessCast podcast, Knight, whose most recent book is You Should Have Asked: The Art of Powerful Conversation, reveals three of the traits that separate the entrepreneurial winners from the losers:

1. People skills

You may think you can do well by sinking more money in the business, or by working longer hours, or by simply wanting it more. And while those strategies can work, Knight believes too many entrepreneurs prioritize them at the expense of one crucial factor: people skills, especially when it comes to dealing with clients. "If you make people feel positive things, you connect with them on a human level," he explains. "Too many entrepreneurs think it's enough just to connect with them on a business level."

If, after meeting with you, a potential or existing client walks away with nothing else but information on your product or service, there's nothing to stop them from choosing a competitor who offers a similar product or service, Knight says. "Your distinguishing factor is always going to come down to the relationship you can create with that individual," he explains. "If that person likes you, they're going to do more business with you than with your competitor they don't like as much. People always buy from people they like, respect, admire and value."

2. Guts

Over the years, Knight has encountered many entrepreneurs who are afraid to put real stakes on the table—by, perhaps, taking out a big loan, or leasing office space. Such timidity has no place in running a business, he says. "The people who are most successful are the people who are willing to do what it takes to get there," he explains. "You have to be willing to have the guts to put in the time, to take the risks and to really believe in what it is that you want to really put out there."

3. Discipline

Time is an invaluable commodity for entrepreneurs, Knight believes; and too many squander it. Success requires discipline, especially when it comes down to focusing on what really needs to be done. "Stop being a slave to technology," Knight says. "Stop thinking you need to check your email or text messages 500 times a day. Set a time in the morning you'll check your email, then leave it. Same in the afternoon. And stick to it. Otherwise what you're doing is wasting your time."

It's very easy to focus on the tough parts of running a business in 2014. But every once in a while, it's useful (and encouraging) to remember just how much things have changed for the better.

Bill Robson has no shortage of suggestions. The president and CEO of the not-for-profit economic think tank C.D. Howe Institute is the guest of this week's BusinessCast.

Over the past 25-odd years, he says there have been three significant policy changes that have unquestionably made Canada a better place to do business for entrepreneurs. Here's what they are:

1. Free trade

Canada's trade activity with the U.S. is now so robust that it's easy to forget that free trade between the two nations was once considered a grave threat to business north of the 49th. "Some of the very important framework policies that are now part of the landscape in Canada were at one point topics of hot debate," Robson says. "For example, free trade with the U.S. is now something we've lived with for a long time. We've seen some important positive developments in the economy as a result of that agreement, but back in the late 1980s there was a federal election fought over it. Many people were worried." They needn't have been, he adds; the consensus among economists is that free trade with the U.S. has been an overwhelmingly positive development.

2. Low inflation

The past several years have conditioned most Canadians to get used to—if not expect—low inflation rates. "People have come to count on it," explains Robson. "But back in the late 1980s and early 1990s, lots of people thought low inflation wasn't possible; others thought it wasn't desirable." Anyone with a longer memory knows that keeping these numbers low is in the interest of everyone, he adds: "People who remember the late 1970s and early 1980s will remember the difficulty of planning a business where price increases could be double digit in a year, and where interest rates tended to swing wildly."

3. Reduced business tax rates

Complaining about taxes might seem appropriate, but it's worth noting that in that regard, Canadian businesses today are much better positioned than they once were. "Another area that's made quite a difference is the effort we've put into business tax rates, particularly the high corporate tax rates we used to see provincially and federally," says Robson. C.D. Howe's position has long been that high taxes "are a very expensive way of paying for government programs because of the discouraging effect they have on business investment." Lower rates have proven to be far more effective for the economy as a whole, he adds.

Tony Gareri is a happy guy, and he wants those around him to be happy, too. Gareri is the CEO and "chief of wow" at Roma Moulding, a Toronto-headquartered manufacturer of picture-frame mouldings. And he loathes the idea that work is something to be dreaded. "My upbringing was ‘if work doesn't hurt, you won't be successful,'" he says in this week's BusinessCast. "I hated that idea."

So, when the time came for him to run his own firm, he decided to take a look at some wildly successful companies to probe why they were doing so well. "They all had one thing in common," he says. "They were producing ridiculous results while being happy. It was the exact opposite of what I'd known."

That's what inspired Gareri to ask the question that's come to define his work: "How can I be the happiest, drive happiness in the workplace and drive and deliver results to our team members, who in turn will inspire and move and ‘wow' our customers?"

In Gareri's view, it's essential to 'wow' clients. "The world is changing. Google has commoditized the whole world. You enter 'picture frames' and you can get 17,000 results," he explains. "When everything is commoditized, what's left is experience. You can have a good experience, a great experience or a ‘wow' experience."

Why bother going the extra mile, from ‘great' to ‘wow'? "The only thing people remember is the way you make them feel," Gareri says. "If you can make them feel ‘wowed,' moved and inspired every day, I guarantee you they'll keep coming back."

In Gareri's view the ‘wow' factor is only possible when the person providing it is happy and engaged. That's why he's become fanatical about hiring for culture fit. Roma is built on 10 core values—among them: to be different, to have fun and to deliver happiness. Gareri and his team work hard to identify these traits early on through two sets of interviews: the first, with a hiring manager, to go over qualifications and experience; the second, a "culture conversation" with Gareri himself. "I'll have you in for a simple conversation to see if you posess our core values," he explains. "I can teach you how to join a frame, a marketing technique or even how to speak powerfully. But I can't teach you how to be humble or to live with integrity.

"Happiness is a feeling, it's an experience, it's an emotion," he continues. "When any individual comes to work at Rona, I coach and mentor them into believing that they work now at Disney World and their clients are those wonderful children coming in. Our job is to give them an experience that 'wows' them."

Ultimately, Gareri sees this as the main purpose of his booming business: "Moulding is what we do; it's not why we do it," he says. "If you really take a moment to ‘wow' anyone you come in contact with, you can't help but have good results."

Howard Fero is a big baseball fan. So when the Connecticut-based principal of The Leadership Doc first started thinking of writing a book on the best way to lead people, aligning it with his favourite sport seemed a logical solution. "I thought, ‘what if we looked at leadership through the eyes of Major League Baseball?'" he says.

The result is Lead Me Out to the Ball Game, which Fero co-authored with Rebecca Herman.

Fero believes that anyone holds the potential to be a great leader. "Leadership is not about the position you're in," he explains in this week's BusinessCast. "That's a mistake a lot of people make. They think someone is a leader because of what's on their door. Leadership is defined by how people act, not their title. It's about how we can influence people and impact others."

Fero's book lists 10 characteristics that make for great leaders (regardless of position), drawn examples from the ball diamond. Here are his top three:

1. Passion

In baseball, the best coaches are those who are fired up about the sport and its players, Fero explains. "You'll be more effective doing something if you're passionate about it," he says.

But it's not enough to simply love what you do; you have to communicate it, as well. "You need to show your passion to people around you," he says. Why? When the leader is passionate—think: a coach jumping for joy in the dugout after a big home run—it's tough for everyone on the team not to feel the same energy. "It gets other people excited."

2. Support your people

In professional baseball, players can get into difficult situations: they might argue with umpires, or be up for a trade. The most successful coaches are the ones who support their charges when times are tough, Fero says. "Think about how much harder you'd work for a manager if you knew your manager would support you when push comes to shove," he explains.

Again, communication is key here. You have to let your team members know you have their backs in order to get the best out of them. "It's also about showing you're always behind them," Fero says. "Sometimes we just have to give support to people and remind them what they're capable of."

3. Create a winning culture

"A winning culture is when you have an organization that's focused on the goal," explains Fero. In baseball, it's to win games. In business, it's about whatever the strategic goal of the organization is.

In baseball, a utility infielder seldom gets as much credit as the all-star home-run hitter, but the infielder is equally important, Fero explains. And the best leaders make sure that that's known across the organization. "We have many utility players in our organizations. They may not be star salespeople; they may be doing backend work. But that person is just as important as anyone else; we need them to produce well and make sure everyone understands that," he says. "Leaders have to communicate to people through the ranks both the goal of the organization and their role in achieving it."

You may think there's never been a better time to be an entrepreneur. Bruce Hunter begs to differ. As president of Lighthouse 360, a firm that offers advisory services to SMEs, he deals with entrepreneurs on a daily basis. And while he's encouraged by the increasing interest in entrepreneurship, he has some big concerns.

In this week's BusinessCast, Hunter shares what he considers to be the three biggest crises facing entrepreneurs today—and shares some insight into what can be done about them.

1. The succession crisis

Across Canada, there are hundreds of thousands of baby-boomer business owners approaching retirement age. And not many of them have a succession plan. This rankles Hunter. "There are very, very few of these people concerning themselves with exit, much less developing a formal plan," he explains. "That's a significant issue." The problem, he says, is that most of these boomers are relying on their businesses to fund their retirements. "And those funds are either going to be totally non-existent or significantly less than if they'd prepared for succession."

Hunter adds that it can take a long time to polish a business to prepare for sale—longer than most entrepreneurs anticipate—which is why so many business owners will soon be scrambling. "The runway is getting short," he says. Thankfully, he adds, it's easy to get started: a simple Google search of "succession planning" or "business exit" will reveal enough resources to help any entrepreneur start the sale process.

2. The mentorship crisis

Entrepreneurship has become a very hip thing to do for young people, especially those straight out of college or university (or those following Mark Zuckerberg's dropout approach). While Hunter appreciates this movement, he's concerned that many are getting involved in a world for which they're not prepared. "You end up with folks in charge with not a lot of experience; they didn't have deep development," he comments. "In some ways, it's the blind leading the blind. A lot of young entrepreneurs have no idea what they're up against."

The solution, he says, is to build more robust—and useful—mentorship programs, through one-on-one guidance or peer groups. Fortunately, Hunter points out, "there are a lot of entrepreneurs looking for opportunities to give back."

3. The time-to-market crisis

"There's been massive change, sponsored by the internet, related to the globalization of the marketplace," says Hunter. "That is rapidly increasing the change we see in the market." This creates some real issues for entrepreneurs, he adds.

"It used to be that an entrepreneur had a lot more time to get out there and test different ideas, to make sure systems and infrastructure were solid before they went out to market. You no longer have that advantage. You don't know who's sitting there in a garage somewhere in Russia coming up with a better idea. The collapsing of that timeframe for you to get your product from idea to market is becoming quite a problem." And that leads to what Hunter calls the "not ready for prime time" effect. "A lot of these businesses are not able to withstand the broadsides of some marketplace events, which also are happening more rapidly," he says.

The upside of the rapidly changing global economy is that entrepreneurs today tend to think of themselves as citizens of the world, not just citizens of Canada. "I think that's a good thing," Hunter says.