Small Business Issues – Part IV

Since I have covered this business in three posts already it would have been worth it to post an update as events unfold. If you’ve missed it here’s the required reading – Part 1, Part 2 and Part 3 respectively.

The way thing were unfolding the business was supposed to crumble in 6 to 7 months. At least that was the term I have predicted based on all the issues I had uncovered back in March. So overall-  from my point of view at the moment – this company has got until about August to shut its doors. When I communicated this to the business’ manager he, obviously, didn’t quite trust me. We haven’t built that trust yet, as I was only doing initial assessment. Turned out I should have been paying more attention to the depth of the problems. But before we get to the conclusion – here’s issue #4 – problems with sales and marketing.

Although I’ve covered marketing somewhat in previous posts, I completely skipped on the way the pricing was made. As you may already know (and if you don’t – read on with more attention) the initial pricing is build based upon your cost of running business plus the margin. In other words, if the cost of doing business (CODB) per client is $100 and your margin is 20% (all numbers are not real and are just for example’s sake) then your minimum price of service per client should be $120. If you go lower than that then there is no point to be in business at all. You may slightly deviate in one way or another, based on market conditions, your own value proposition and competitive advantages you possess, but that’s how you determine the initial pricing. Once you’re ON the market – you can (and you must) take steps to reduce CODB and increase margins. Market won’t let you go far off the median – unless, of course, you’re government-mandated monopoly, like AT&T or cable companies.

So for this company in question the pricing structure was determined at the whim of the managing partner. Employees’ salaries tied in directly as a percentage of the price of service and, therefore, are also at the same whim. Having heard about so many promotions and sales event but having absolutely zero knowledge of how these things worked this partner distributed flyers and promo cards with 10, 20, 30 or – the latest – a 50% discount. Funny part is that his two employees who actually performed the services and collected the money found out about promotions from clients who showed up with promo materials. Of course with rates already lowest on the market their salaries were discounted into ranges of minimum wages or less. From previous experience I can attest that sometimes expensive places do these kinds of promotions for a very limited time to get new clients in. Experienced sales people pitch more expensive services that span longer periods of time, so overall this tactic is very successful. But just discounting your service by 50% out of nowhere is a message to the employees “we’re going out of business, grab what have left before we close our doors“. To the clients it reads like “we’re so cheap that McDonald’s looks like 5-star restaurant compared to us“.

As you may have imagined already the employees’ outrage resulting from latest 50% pricing cut was on par with recent volcano eruption. Both employees have quit on the spot. There wasn’t much of quitting involved though – the volume of clients only allowed for one and a half day of work per week.

Having said all that I must admin – I was (again!) being overly optimistic about those 6 to 7 months, it all fell down in less than three. In my defense I can only say that I based those assumptions on brief initial analysis.


But We Already Have A Web Site, What Do We Need A New One For?

The small business owners just don’t get it. We, the technical types, can hype ourselves about HTML5, Flash, patterns, interactivity, social features, geolocation and other cool buzzwords, but regular small shop owner couldn’t care less. They have enough on their hands to worry about, so why should they care about brand new web site if they already have “a web site”? Just because you want their money it doesn’t mean they are willing to give it to you.

Here’s what you can you, as a small business owner, should know about the web site and his business. First of all – even though you may not realize it, people are talking about your business. With the proliferation of the web sites like Yelp, Kirtsy and omnipresent Craigslist, there’s always somebody talking. As an example, let me tell you a little story of one of my remote relatives who owns a shoe repair business in Williamsburg.

One day he came back from work and told his family that one of his clients told him that someone somewhere on the internet posted that his business has closed. Family council have decided to take immediate measures and my number was dialed. I was told to fix the internet or whatever was saying that his business is closed. As you can imagine – I was thrilled at the task of fixing the whole internet on such a short notice. As it turned out – it was nothing more than some weird check box on Yelp’s web site that anyone can tick signifying that business has closed. Of course, there’s no way for Yelp to verify that, so they have just gladly accepted it – just like they did accept my correction of this. In just a click of the mouse the internet was repaired and continued to go on as usual.

As I have read, with much amusement, the business already had quite a few reviews. Most of them discussed the pricing structure – or rather a lack of one. A few more things here and there that I thought my relative should have known about – and I was ready to bring the happy news back to him.

What this boils down to is this – now matter how small your business are, in this day and age, there’s something online about your business. If it’s not your web site – then it’s someone else’s rant about your business (not necessarily a happy one). If, after such a rant, your potential client will see a web site that was designed by an 8-year old, that potential client will never become a real one. A few years ago you only competed for customers’ attention amongst your competition, but you always were. Now you’re competing against a number of sites that hold numerous reviews and ratings, people’s blogs and tweets and whatever else. Keeping up with all that flow of information with old and antiquated web site is just impossible.


Google’s Picasa TO DO List: Wake Up And Get It Done

Google's Picasa TO DO List: Wake Up And Get It Done With all the features, bells and whistles being added to Gmail recently I look at yet another Google’s failing project – Picasa. This piece of software hasn’t been updated for God knows how long. Yes, they’ve added a few nifty things here and there but these little perks can’t make up for core features that users have been begging for. In order to assist Picasa’s developers team I have jotted down a short list of thing we, users, needed as of 2008, so you, guys, are, like, 2 years already late. Pay attention!

1. Folders and Sub-folders. Seriously, one level structure is so very CP/M-86 that only very old people like myself can remember the days when we DIDN’T have folders. My regular structure of storing photos – and I have found it to be very simple, most people got it even more complicated – is as follows:


Why in the world would you deprive me of having folders? Yes, I want to maintain that structure on my web albums as well, where some people get to see Edited_Large folder and others are only allowed to see Small_Images_For_Web folder. It could be photos, it could be web design mock-ups – anything. Not having sub-folders is a usability killer.

2. Storing Raw Images. I hope you are aware of the idea of Picasa being a photo management tool. I would also fancy a wild guess and say that photographers would be interested in it, especially with such a good pricing on storage. In case no one told you before most photographers – even amateurs like me – like to shoot RAW images, the so-called “digital negatives”. They also would love to store them – UNCHANGED! When I upload RAW file (it’s a .NEF file, since I shoot with Nikon) to Picasa it gets crap-converted to JPEG and there is no way to get the original back. The whole point of my purchasing a 200GB space chunk is to be able to store RAW files. Look at your own support forums, there are people who did the same. There will be more people doing the same if you let them do the thing they want the most – back up their work “in the cloud”. I am not a professional and I’ve got 100GB of photos to store, think of all the money you are missing from true professional photographers.

3. Web Albums Usability. Did you know you have to make 5 clicks to delete a photo, counting from your albums home page? Did you know it takes the same 5 clicks just to get the link to the image if I want to embed it somewhere in my blog? Isn’t there anyone who could just go through the Picasa Web Albums once or twice and point to obvious usability flaws like these? Did you know there’s sorting by folder/album name pretty much everywhere except Picasa? Also, have you ever seen the how long the URL for RSS feed is for album? Can we make it user-friendly? Can we make it sorted with latest picture on top? Also, how long since anyone clicked on that “Share” button – where’s Buzz, Facebook, Twitter links? E-mailing people a whole album of images in 2010? Seriously?

4. Picasa Software Usability Flaws. I will not complain about lack of sub-folders again, because this it seem to be a feature rather than a bug. Since Web Albums lack sub-folders it is only natural that this inconvenience is propagated down to the desktop app. My biggest gripes are the Web Albums synchronization (or rather lack of thereof) and lack of mass-editing features. I have Picasa installed on 2 PCs and want certain folders to be synchronized. I can easily do it in DropBox, but for some reason Picasa can’t seem to understand how it’s done. Every time I try to sync a folder with Web Albums Picasa creates a new album. Why? I have no idea. As to the mass-editing features – it would be nice if I could assign tags in Picasa to bunch of images at the same time. You know, like – select them and tag all selected. If iTunes can do that to mp3 files I don’t know what the problem is with images.

5. Things That Will Make Picasa Better. These are not things that make Picasa completely unusable, these are things that – if implemented – could give Picasa a significant advantage over other services.

  • E-mail to a specific album – since I can already e-mail photos to a specific address that will place picture into a “dropbox” folder, I see no reason why you couldn’t make a next step with this and actually allow using different aliases for different folders. No one else does it – as far as I know.
  • Google Analytics for Picasa – let me use my Analytics account to see who’s looking at my photos. This would be incredible.
  • Group Photos or Lists or Streams – let me combine photos from different albums into groups or lists. Think Gmail Labels feature. BTW, did you know Gmail allows nested labels now? Oh, and customizable RSS feeds for these lists, too?
  • Different picture sizes links and feeds – how about being able to get direct links to various sizes of a picture? Can we also get an album’s custom RSS feed to be able to pull images of various sizes? Flickr had it for ages.
  • Versioning – let me keep different versions of the same picture. I know it’s rare and far-fetched, but it’s a surefire hit with professionals – and who else would buy hundreds of gigabytes of space?

Still not convinced? How about open sourcing the Picasa, so that someone else picks up the ball you’ve dropped awhile ago?

P.S. I find it interesting that Picasa blog has comments turned off. So I cannot even tell them their ten times more albums feature is just another lousy workaround of not having sub-folders in albums.