I am delighted to report that Prisere LLC is one of three finalists for the FedEx Small Business of the Week. The public will choose the winner by online voting. You don’t have to disclose any personal information to vote, just one mouse-click will do it. Please vote for us and encourage your friends and family to vote for us. Here is the site where you can vote until 8:00 a.m. Tuesday, December 13:

http://www.nflsbotw.com/vote.html

After the flood

Check out the New York Times‘ weekly small business case study which presents the story of Pulling Down the Moon, a Chicago business affected by disaster. Three experts were asked to advise the business owners with respect to their future leasing plans. Our comments were heavily edited for space considerations. Here is the complete comment I submitted:

“The co-founders and owners of Pulling Down the Moon are to be commended for doing so many things right: developing an operations manual to provide for systematic processes to scale the business, storing critical data offsite and securing business interruption insurance to replace their lost revenues. Sadly, few business owners take these essential steps, resulting in losses that could be avoided.

But now the business faces a dilemma: should they stay or should they find new space? The answer to that question is to be found in the mission of the business, providing stress-reducing yoga to aid fertility. Disruptions are stressful.  We are all on autopilot to a certain extent, relying on repetitive familiar routines to get through the day. Even trivial changes, such as a new commute on an unfamiliar route, cause stress. Should Pulling Down the Moon impose upon its clients the stress associated with its current sub-leasing arrangements? Better to find space that is less vulnerable to water damage to ensure future continuity for the business and its clients, who need a consistent, soothing space in their lives.

But the founders of Pulling Down the Moon should be under no illusions that they will move from the back seat to the driver’s seat by moving from a sub-lease to a primary lease.  A commercial tenant’s disaster response is always dependent on the efforts of its landlord. That is why businesses should consult with their landlords to determine in advance what facilities and services will be in place after a disruption and establish roles and responsibilities for such cases. This avoids disputes that can arise later. Pulling Down the Moon is fortunate that it avoided what could have been a costly misunderstanding by having a relatively cooperative landlord. As it enters into lease negotiations with a new landlord, it should document explicit arrangements for procedures in the event of a disruption so both landlord and tenant can each benefit from greater predictability.”

Donna Childs is the founder of Prisere LLC and the author of Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses (Wiley, second edition paperback, 2009).”

Thanks to the New York Times and to author John Grossman for a great case study that we hope will raise awareness about the importance of preparedness.

A friend took this photograph at a Yankees baseball game showing the batter hitting the ball with such force that he broke the bat. It is a great photograph, the detail is perfect. And I thought it a great image for this blog posting describing what a friend and fellow small business owner had to do to get a large corporation to pay her (hint: it is one of the Wall Street banks that accepted government bailout money) an invoice that was more than two years past due. FINRA, the Financial Industry Regulatory Authority, oversees this particular company and, in the course of a routine audit, found that it had failed to properly disclose this past due debt on its books. After FINRA auditors surfaced this matter, the company paid my friend’s business the money that was well overdue. And FINRA imposed a fine on the company of five times the debt owed my friend. She told me that she has over $50,000 in receivables due her from large Wall Street firms for work that she has performed that she has been struggling for over two years to collect. Now she is informing all of them of the action FINRA took against this one company in the hope of motivating the others to pay. “I know I am destroying my relationships with these companies,” she told me, “but I need the money.” Actually, if she has to fight with them for over two years to get paid, these relationships are not worth preserving. Well done, FINRA.

Hurricane Irene caused the worst flooding to strike Vermont in 83 years, leaving the state under 15 inches of rain in a single weekend. National Weather Service hydrologist Greg Hanson described it as “one of the top weather-related disasters in Vermont’s history.” A little over two months later, residents and businesses are struggling to recover. USA Today reports that Vermont residents are learning that while FEMA, the U.S. Federal Emergency Management Agency, provides assistance to individuals, the only alternative for small businesses is to apply for federal disaster loans. And, predictably, most businesses didn’t have flood insurance for not being located in a flood plain and for the fact that the insurance premiums are very expensive. Predictably, Vermont’s representatives, notably Senator Sanders, are protesting that disaster relief is caught up in Washington politics. Senator Sanders also protested the slow pace of approval of SBA disaster loans, particularly in comparison with local assistance from the Vermont Economic Development Authority. Vermont’s economy is dependent of its small business sector and local businesses are doing what they can to help one another. Independent Vermont Clothing, an online retailer, raised $26,005 for the disaster relief fund of Vermont’s Red Cross by selling T-Shirts with a “Support Vermont” theme. I already bought mine, shown here on a dress form, because there is no one around today to snap a photo of me wearing it! Whether it is donating to the relief efforts, volunteering to help or patronizing Vermont businesses, either in person or online, we should all show our support.

Not everyone is persuaded that our current crazy weather patterns are the result of climate change. But consider the experience of Oklahoma, a state in the heart of “Tornado Alley”. This has been an active year for tornadoes, with 104 having struck the state since January 1 to date, well above the 62 tornadoes that have struck the state annually, on average, over the past twenty years.  But in 2011, extreme environmental conditions have resulted in the full spectrum of natural disasters striking Oklahoma:

• Earthquake. On Saturday night, a 5.9 magnitude earthquake, the most severe in the state’s history, struck Oklahoma. Its effects were felt from Dallas to Des Moines.
• Heat Wave. Oklahoma experienced unprecedented heat this past summer, with daily average temperatures during the month of July.
• Drought. More than 99% of Oklahoma is experiencing severe drought, with extreme conditions in 85% of the state. This year to date is the second worst on record for drought; 1921 being the most severe. The drought has also affected Texas, Louisiana and other southwestern states, counting as one of the 2011 record-setting weather disasters.
• Snow/Record Cold. From extreme heat one month to extreme cold the next, Oklahoma also recorded its coldest temperature on record this year, February 10, at -31 degrees. On that same day, Oklahoma experienced the heaviest 24-hour snowfall on record, with 27 inches of precipitation.

In addition, 2011 witnessed new records for wind speed in Oklahoma, 151 mph gusts during a tornado on May 24, and on the previous day, the largest hailstone crashing down. Given the increasing frequency and severity with which natural disasters strike, we have to be prepared for anything. Call it the “New Normal”.

On Thursday evening, I attended a reception for “OPM”, Owner President Management, an executive education program of the Harvard Business School. We gathered at the Setai Hotel where we were treated to a presentation by Robert Steven Kaplan, HBS Professor of Management Practice. Professor Kaplan is the author of What to Ask the Person in the Mirror: Critical Questions for Becoming a More Effective Leader and Reaching Your Potential. He was also formerly the head of investment banking at Goldman Sachs and so began by sharing his insights into economic trends, in particular, the most frightening trend of all, the decimation of the American middle class. His view is that recovery will take longer than expected and we should plan our capital and expense structures for the downside scenario. Professor Kaplan believes that this is also an important time to take care of yourself to ensure that you will have the resilience and vitality to lead your organization, with proper nutrition and sleep and don’t skip vacations! I share his view that we are in a marathon and not a sprint and that we need to husband our resources carefully during this challenging period.

Today, the Red Cross Chapter serving the Washington DC region is holding its annual fundraiser, “In the Bag”. The women’s committee of the chapter will auction designer, vintage and celebrity handbags to help fund the vital services the Red Cross provides to the community, including disaster relief, first aid training and assistance to military families. This event raised $20,000 last year and this year’s goal is to reach $40,000. Just to appreciate how important funding support is, consider that the National Capital Region of the American Red Cross provides 250,000 meals monthly and 750 volunteers to local hospitals. In addition, the Red Cross chapters also support international disaster relief efforts. Last year, the Capital Region Chapter provided emergency services to over 40,000 people.

I donated a handbag that was custom made for me at a shop in the Peninsula Hotel in Hong Kong. I have never used the bag; it is in mint condition and I hope someone else will enjoy it. You can see it on the auction site which features snapshots of the bags. If you don’t want to bid on a bag, you can volunteer or contribute funds. This graphic image, by the way, relates to a Red Cross chapter in Louisiana “Power of the Purse”, so check out what your local Red Cross chapter is doing this month as you may be able to get a great deal on a top-notch handbag.

It is particularly important that we support the Red Cross this year. In this tough economy, with persistently high unemployment, it is no surprise that charitable contributions have declined relative to years past. At the same time, the frequency and severity of natural disasters has increased dramatically and we certainly cannot count on government support, either at the community, state or federal levels.

So let’s all do what we can to support the Red Cross which delivers services critical to every community.

In Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses (page 95), I wrote of the “Info-Stress” phenomenon, of being overwhelmed by the volume of information we must process every day. One technique I recommended was filtering out the irrelevant data to make more productive use of your time. Authors Christopher J. Frank and Paul Mangone give this topic much more thorough treatment in their book Drinking From the Fire Hose: Making Smarter Decisions Without Drowning in Information. I had the pleasure of meeting the authors, who graciously signed my copy of their book, at Business Insider’s Social Media Analytics 2011 conference. The book presents seven “fire hose” questions to help you manage the flow of information, starting with asking yourself “What is the essential question?” to sharpen your focus.

I particularly enjoyed the case study of the online job search business in Germany that had the right solution but ahead of its time. Here the essential question that the business leaders had failed to ask was “How long will it take to change user habits?” and introduce people to new online job tools. My own analogy for that experience is that of short-selling a stock that you (correctly) believe will decline in value. It is not enough to be correct; you have to be correct in the near-term. It can bankrupt you if it takes a long time for you to be proved correct as you will be marking your position with cash daily. Being right in anticipating a new market is not sufficient; you have to be proved correct before you run out of cash. This issue continues to be a challenge for me.

I am working to develop my own business dashboard with the key metrics that I want to track. Determining what to include is relatively easy. Making decisions about what to exclude is much more difficult. That challenge is perfectly captured on the book cover: the fire wire spouting data.

Social Media Analytics

I want to express my thanks to Business Insider for including me in its Social Media Analytics 2011 Conference which took place in New York yesterday. The conference addressed the challenges in measuring the return on investment of social media efforts. Given the efficacy of social media tools in reaching consumers, it is no surprise that companies have incorporated everything from Facebook to Twitter to YouTube in their marketing budgets. Indeed, according to a recent WebLiquid survey, the majority of marketers plan to increase their social media monitoring spend next year. But there is no clearly effective standard in measuring social media ROI.  Business Insider provided a forum for Fortune 500 companies and social media experts to share best practices in monitoring and analyzing social media efforts. The conference addressed:

• The 40,000 foot view: how social media is changing business
• Getting real ROI out of social media. What to do, which platforms to use, what to measure, which tools to measure with, how to judge success, what to keep doing, what to stop doing
• Move over, SEO: How to optimize your content and product for social media and sharing
• Social in the post-PC world; how to think about and measure social media for smart phones, iPads, connected TVs, apps, and HTML5 web

I particularly enjoyed the presentation of Eric Kuhn of United Talent Agency whose message gave hope to social entrepreneurs everywhere as social media levels the playing field. Kuhn spoke of how Paramount had spent $3.1 million to run a commercial for its “Transformers” movie on the Super Bowl. It resulted in 37,000 tweets, money well spent. But Disney promoted its movie “The Avengers” for free on its Facebook page and garnered 65,000 tweets. I left the conference encouraged that small enterprises are every bit as competitive with larger corporations with vastly greater resources thanks to the power of social media.

Business Insider had offered free registration, worth $399, to three participants who could write 50 words about how they would benefit from attending the conference. My 50-word submission addressed the challenges of limited resources for a start-up social enterprise and apparently someone at BI has a soft heart. Thanks again, I will put this learning to good use. And if you didn’t attend the conference, check out #SocialMediaAnalytics to read the tweets of what you missed.