How Small Business Owners And Entrepreneurs Can Succeed written by John Jantsch read more at Duct Tape Marketing
Marketing Podcast with Barry McCarthy
In this episode of the Duct Tape Marketing Podcast, I interview Barry C. McCarthy. Barry was named President and CEO of Deluxe Corporation in November 2018 and is a member of its board of directors. He’s also the author of Small Business Revolution: How Owners and Entrepreneurs Can Succeed.
Key Takeaway:
Questions I ask Barry McCarthy:
- [1:21] What were you trying to convey with the word ‘revolution’ in the title of your book?
- [3:56] How do you define small business?
- [5:43] Your new book was very much informed by a series that you called the SBR series. You called the SBR series — could talk a little bit about that entire project?
- [7:08] What has gotten harder for small businesses in the last decade?
- [8:27] How hard was it doing more in the digital space for an organization like Deluxe?
- [12:27] In your book, you cover some of the main areas such as HR, marketing, and finance – what are some of the key lessons I’m going to learn?
- [14:01] Most entrepreneurs are really not born leaders, they’re visionaries. And then when it comes to being a leader, hiring, and managing that’s really the biggest area where they struggle. What’s your advice?
- [16:29] What are the most important numbers that you really need to get your arms around early on in a business?
- [19:09] The epilogue of the book is when to abandon the dream. So what advice do you have to somebody that is facing that?
- [20:49] Where can people find out more about the Small Business Revolution and even check out some of the series that you did along with the book?
More About Barry McCarthy:
- His book — Small Business Revolution: How Owners and Entrepreneurs Can Succeed
- The Small Business Revolution TV series can be found at:
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John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the MarTech podcast, hosted by Benjamin Shapiro, brought to you by the HubSpot podcast network. Ben's episodes are so awesome. They're under 30 minutes. They share stories with world-class marketers who use technology to generate growth and achieve business and career success. Ben is a great host. I've been on his show. He's been on my show. He always really digs down and gives you actionable stuff that you can take away and do. And he's always bringing up new stuff. The science of advertising, how to figure out what to automate, just things that marketers are wrestling with today. Check it out. It's the MarTech podcast. Find it wherever you listen to your podcasts.
John Jantsch (00:51): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch. My guest today is Barry C McCarthy. He's the president and CEO of deluxe corporation, the payment solution and biz technology company, and is a member of its board of directors is also the author of small business revolution, how owners and entrepreneurs can succeed. Very welcome to the show,
Barry McCarthy (01:18): John. Great to be with you. Thanks for the opportunity. You
John Jantsch (01:21): Bet. So I have to ask first right off the bat, why revolution seems a bit dramatic or what are you trying to convey there with the use of that word?
Barry McCarthy (01:29): I think one of the biggest things that we all learned through COVID and the COVID crisis was the absolute essential nature of small business to the U S economy. Something north of 90% of small of businesses are small businesses that the primary driver for employment in the country, and then the leading indicator of overactive overall economic health. And so I think that maybe as a country and as a nation, we haven't paid enough attention to small business. And small business really is revolutionary for communities that they serve. And at our core, as a company deluxe, fundamentally believes that's our mission statement, the work champions for business. So communities thrive because if business particularly small business does not succeed communities can't succeed because a small business hires people, those people have needs for other services, whether it's a pizza on Friday night or a dry cleaner car service that create other jobs that create even more jobs that create resources for communities to be invested in schools and parks and roads. So it really does come down to helping small businesses succeed. So communities in turn can thrive.
John Jantsch (02:39): Yeah, it seems like, unfortunately it did take a pandemic maybe to shine a light on that. It seems like unfortunately about every four years in the fall, a lot of presidential candidates seem to talk about small business being the backbone, but then we get away from it. Don't we?
Barry McCarthy (02:52): We do John and I, we wrote this book. I wrote this book because I'm a small business guy, myself. I started small businesses myself, and I know that the excitement, but also the challenges of, of doing that. And there's, there are really, aren't very many how to practical guides written in the voice that someone can read. And then my books, while business revolution, you can read a chapter, put those lessons to work and come back and read the next chapter. It's not a textbook where you have to read every chapter to know the punchline. Every chapter has conclusions of things that you can go work on today to make your business successful or more successful. And it's intended to be a user guide and for people to use it, um, pick it up, put it down, pick it up, put it down in the normal operation of their business. Cause it's a small business person, myself at different points in my life. The one thing you never have enough is time. You never have enough time. So you've got to be ultra efficient and it's gotta be ultra convenient and easy. Otherwise you're just not gonna be able to use the book.
John Jantsch (03:56): So it was just, I'm curious how you define small business. I get the assets question all the time. I've worked with small businesses for 30 years. I've written seven books on the topic, and I'm curious, you look at the SBAs definition, doesn't really apply in my view. I'm curious how you view, is it size or is it a point of view even?
Barry McCarthy (04:13): I think that's such a great question and I, I don't think there's any magic on when you go from being a small business to a medium-sized business. Yeah, the most important thing to remember though, that every business started as a small business. And so every business has to deal and even large businesses have to deal with some of the same challenges as a small business, finding the next customer, uh, managing efficiently, accepting payments in a us in easy, in an easy way. And so I don't have a, you know, specific snap the line. And this is what a small business is. I think about thinking about them as neighborhood businesses or maybe multi location businesses, short of multi-state and dozens of locations. And those are the businesses that the, that the book is written about it. I, John, one of the things I'm guessing what your listeners would be interested to know is why the heck would the Lux and the CEO of deluxe it's a big company. Why would the Lux write a book about this? And the simple answer is that our company supports more than 4 million small businesses, and we've been helping small businesses for over a hundred years. So we have really unique insight and understanding about what it takes to be a successful small business owner. And we thought it was important to share that insight, especially in the face of COVID. And as we, as obviously, hopefully here we're exiting COVID, but all the more reason to help businesses understand some fundamentals and some tactics that can help them succeed.
John Jantsch (05:43): Th th this book was very much informed by a series you called the SB or series. I wonder if you could talk a little bit about that entire process?
Barry McCarthy (05:52): Sure. A company deluxe supports, as I said, a minute ago, 4 million small businesses, and for the company's hundredth anniversary and created a program called the small business revolution, that was simply how to, or fix it show just like you would see in real estate make-overs these are business make-overs and go to a small towns and help six or eight businesses in those towns understand how to make their business better and turn it into a TV show. And along the way, we turn it into the number one lifestyle program on Hulu prime video. And we've even gotten an Emmy nomination for it because it tells the story of small businesses and the common issues that every business faces we showcase. And we bring deluxe experts to the show to talk about it. And the book goes far more than we can do in a TV show has meant for people to use as a guide and a tool and a template for their business, where the small business revolution television program is enormously entertaining. And it gives you quick soundbites about the biggest issues. The book goes, nanny steps farther than that, to help with a real nuts and bolts of have the how to, and for deluxe, we thought that was important because this, these are, this is the market we serve. The products we offer are all designed to help small businesses succeed.
John Jantsch (07:08): So let's just think back maybe the last decade or so, what in your view has gotten harder?
Barry McCarthy (07:15): So many ways it's so many ways small businesses have had to face additional struggle. So forget COVID for a minute, right? Even before COVID the advent of large scale commercial enterprises that can increasingly compete with small businesses for that market share. It's not just the big boxes. It can even be boutiques that are creating multi franchise locations or multi-store locations of huge issue. And of course, everything e-commerce has put a extra challenge and exclamation point after the challenge for small businesses. And of course, a number of small businesses have found brilliant ways to differentiate against these big competitors and also to harness the internet. And in our book, the small business revolution, there's a whole ton of information, several chapters in the book about how to position your in e-commerce or even just in the web in general, if that's not going to even be your primary storefront, how to leverage that, how do your social media channels to drive foot traffic to a physical store? These are common challenges. Every small business owner faces.
John Jantsch (08:27): I think I became a deluxe customer at least 30 years ago. So many people I bought checks. I bought a stamp to endorse those checks. I'm curious, obviously deluxe does so much more now than it did three years ago. I'm curious about if you were part of the, what I'm guessing was internal struggle to say, Hey, we have to be doing so much more. We got to beginning. And the stuff we never even thought about was our space. How hard was that internally for an organization like deluxe?
Barry McCarthy (08:56): Sure. It was a major pivot point for the company, but just remember this is 106 year old company and its founder wr Hotchkiss got a $300 loan because he was a small business person and it created the checkbook and the modern payments ecosystem. And I've had the great fortune of I'm only the ninth CEO and the company's 106 year history. And so the predecessors did a great job of starting the diversification. But on the three years, since I've been here almost three years, we've really tried to focus on things that would really make a difference for business owners. So we're very focused now on payments and we help businesses, especially small businesses, except credit cards, debit cards, manage their payroll effectively to do electronic payments for their disbursements or their payables. And we even have great tools for accounts receivable management. And then we also help businesses managers that manage their website and their web presence. And we help businesses use data to find their next customers. And we have promotional products where you've got a great logo. We can put the logo on merchandise, which is a very cost-effective way to promote your brand and to have customers engage and use a product with your name on it. And of course our legacy business checks, but checks are less than a third of our business today. It's still about our business is so much more than that really around payments data and cloud services, promotional products as well.
John Jantsch (10:20): I, for one can thankfully say, I write very few checks anymore. I know you don't want to hear that, but that has a bit, that's a big part of what's changed in the world. I mean that, and obviously I think that clearly that drove the desire deluxe to make changes to
Barry McCarthy (10:34): Absolutely. It's not one of the things I think that is, I think most listeners would be surprised to understand is that personal check usage has declined significantly over time, debit cards, et cetera, have had a material impact on that. But business checks are still, we still, we still ship 150,000 packages a day of checkbooks. And that is the biggest customers there of course are small businesses because there is no viable substitute. If you're a restaurant and you've got a truck delivering provisions at your back door, you got to write a check. They don't take a debit card. So you've got to write a check and those checks are gonna be around for a very long time. And so that's a great product in our portfolio of services. We can offer small businesses
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John Jantsch (12:27): So you cover clearly some of the main areas, HR, marketing, finance, in some areas. I'm wondering if we could just bounce across a couple of those, what are what's? What are, what am I going to learn? What's the key lesson in marketing that I'm going to learn from a small,
Barry McCarthy (12:42): The probably the most important thing is that you need to deliver what the customer wants to buy. Not what you want to sell
John Jantsch (12:52): Seems obvious, but it's
Barry McCarthy (12:54): Challenged many small business owners. They start with a dream. They like baking cookies or making hats. And the example is maybe you started and you've got a really great pink cookie. That's terrific. But if the market really wants green cookies, make green cookies, don't try to sell them pink cookies. If they want to buy green cookies, Sallome green cookies and you'll be a whole lot more successful. And I think a lot of small business owners sometimes get lost in and get so in love with a particular product or a flavor of a product or a design that they lose. The fact that their, their, their business can only exist. If it satisfies a customer need. And at some level they have to give up on their own sense of what do they want and get really focused on what the,
John Jantsch (13:44): Because I work primarily in marketing, I see a lot of the struggles that people have around market, especially with all the digital things changing so rapidly. But I will tell you that I think the one area that actually causes more stress and strain, whether they admit it or not is the whole hiring and managing of people. Most entrepreneurs are really not born leaders. They're visionaries. They figure out how to do stuff. And then when it comes to being a leader and hiring and managing, that's really probably the biggest area where they struggle. What's your advice really as a, a way to move forward, because obviously if you're going to grow a business, that's going to be a key area.
Barry McCarthy (14:19): Absolutely. So in the book of two different places in the book, I go and discuss this at some length, small business owners start businesses because they have grit and they're can do they're doers, they're doers. But at some point you've got to go from being the doer to being the leader. And you need to find people that can, can do for you so that you can do more and expand your business. And in the book, small business revolution, I talk a talk at some length about characteristics that make great employees. And part of it is by passion and person and personability, and a previous experience that can be applied and use the cookie shop analogy. Maybe you're not going to find something that's working in a cookie shop before, but you can find somebody that loves cookies. You can find somebody that enjoys being with people, someone that has worked in a retail environment before, and you can get many of the attributes, but I think small business owners don't always think about it that way.
Barry McCarthy (15:17): They think about what is the first available body that will come and work for me rather than being a bit more strategic in what are the characteristics that I'm looking for? Not just to do the job, but that I want on my team that I want to spend my time with eight or 10 or 12 or 20 hours a day as small business owners can work crazy hours. What are the characteristics of those people that I want on my team beyond being able to do the job, a lot of people could serve a cookie out of a counter and take money. But as that may be not be the only, that shouldn't be the only requirement it should be looking for somebody that has passion for the product that people would like that's reliable and wants to be part of something bigger than themselves.
John Jantsch (15:58): Yeah. Because those things are hard to teach. You can teach somebody how to read a recipe. Can't you ask
Barry McCarthy (16:02): Exactly right. Exactly. Yeah. How to make change, but they have to want to be there. They've got to have passion for it. They got to be excited. They got to like what you're doing, and that makes the hiring process more complicated, but worth waiting to get the right people than simply staffing your business with people that don't care.
John Jantsch (16:20): So, uh, another area that I find a chunk of business owners out there that are not as comfortable they're creatives, maybe in the whole numbers part, isn't really their thing. What are the most important numbers that particularly early on in a business that, that you need to really get your arms around?
Barry McCarthy (16:36): Do you know what I'm going to come back to that really quickly? But I think that there is are three things that I think can determine a small business's ability to succeed or fail. Now doesn't mean this is a guarantee, but first you've got to have the right mission, purpose values. You need to be clear on why you're in business. A part of that has to be, it must be that you can earn money from using your talents and labor to do this. If you're not doing that, then you've got a hobby. So mission purpose values. What you're trying to do has to be clear second, um, the business has to make money. If it doesn't make money, it's not a business. It's a hobby. And the third is you have to make sure you've got the right product for the customer that you want to serve.
Barry McCarthy (17:16): And so where we started on this was the financials and the financials using the cookie example. Again, a lot of people think that if I'm just going to cover the cost of the flour and sugar to make a cookie, I've covered my expenses. And if I can make a little bit on top of what the flour and sugar costs, I'm making money, but no, you've got to be able to cover the rent and you gotta be able to cover the power bill and you have to be able to pay your people and you have to pay your taxes and you have to pay yourself. And all of that has to go into the economics of a business. And if you can't pay yourself again, you don't have a business. Now, the things that are most important to understand, I think from a financial perspective is, but what are all the costs of running the business?
Barry McCarthy (17:58): First, second, what can you charge so that you can afford to make a profit and most small business owners, especially those that are very community focused. They don't want to charge fully for their product because they feel like they're part of the community and they can't charge Charlie, Susie, Betty, Bob, Mike, a full price because they're their neighbors or their friends, or they, they teach their kids are on the same soccer team or they go to church together on Sunday, or they see each other kids in the school play. But a business owner has to be steely eyed about the value of the product is to the customer and charge appropriately. And I think small business owners often get confused thinking that, gosh, I want to sell it for the lowest possible price. And now they need to think about what is the value they can, what the value they create for the customer and charge appropriately, because I promise you the neighborhood would rather have a cookie shop than no cookie shop. So charge the right price for cookies. Cause if you're not charging the right price, you're not going to be a business. It be back home, baking cookies in your kitchen and you don't have a business. And the community can't thrive. If that's what happens.
John Jantsch (19:06): All right, let's wrap this up on a down note. Shall we? The epilogue of the book is when to abandon the dream. So what advice do you have to somebody that
Barry McCarthy (19:15): Maybe it was facing them? You know what? This is a really hard thing for people to get their head around, right? Because no one starts a business thinking about it, not working out. They only start a business about how to make it great, but some businesses can succeed, but many businesses have to go back to being hobbies. And that the that's hard to, it's hard. That is very hard. But first people, I think, need to celebrate the fact that they started at all. Because so few people, as a percentage of the population have the courage, the grit, the gravitas, the drive to actually do it. And we need to celebrate that whether or not the business succeeds. The second though is you need to be absolutely honest with yourself about the economics of your business. And I think you need to look at the next thirty, sixty, ninety, a hundred eighty days.
Barry McCarthy (19:59): Can this business actually deliver the profit that I need to continue investing my time, my talent, my resource, because if it can't, that's okay, but you need to stop. You need to stop that before you pour your entire life savings into something where you can't get out. And another book, I outline things. You can, you pay your taxes. Can you pay your people? Can you make your rent payment? You need to stop before you're out of money and not able to meet the commitments that you've made. And you got to have a real grownup Tufts spine to, to get yourself to the place where you're paying attention to that and not fall victim to wishful thinking bias where you think tomorrow will just be better and I'll be better and be better. And it may not be. And you just need to put a real milestones in place so that you don't drive yourself and your personal life and your family's life off a cliff pursuing something that may not work.
John Jantsch (20:49): So Barry tell people where they can find out more about the small business revolution and even check out some of the series that you did
Barry McCarthy (20:58): Absolutely the best place for people to go is our website deluxe.com. And there is of course the lush products there, but there are also many case studies and tools for small business success that are available for free on the website. Additionally, you can buy the book, small business revolution at Amazon Barnes and noble, and of course, neighborhood book sellers as well, small businesses themselves. And of course the TV program, small business revolution can be viewed@smallbusinessrevolution.org at Hulu or prime video. And of course it's also available@thelux.com. Awesome.
John Jantsch (21:32): Thanks for stopping by the duct tape marketing podcast. And hopefully we'll run into you one of these days out there on
Barry McCarthy (21:37): The road. Look forward to it. Thanks John.
John Jantsch (21:39): All right. That wraps up another episode of the duct tape marketing podcast. I want to thank you so much for tuning in, feel free to share this show. Feel free to give us reviews. You know, we love those things. Also, did you know that we had created training, marketing training for your team? If you've got employees, if you've got a staff member that wants to learn a marketing system, how to install that marketing system in your business, check it out. It's called the certified marketing manager program from duct tape marketing. You can find it at duct tape, marketing.com and just scroll down a little and find that tab that says training for your team.
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