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Identity Crisis

“Identity Crisis”

Sidestepping perception problems that can trip up growth.

It’s all too easy for other people to pigeonhole you — and that can stymie growth. We asked business owners to discuss different stereotypes that have hindered their companies and how they’ve coped.

New kid on the block

"The title of ‘entrepreneur’ is a double-edged sword," observes Scot Johnson, head of i3solutions, a $6 million technology consulting firm in Sterling, Va., founded in 1997.

"People view you as extremely flexible and creative, but at the same time, they fear that you’re not stable and a bit unorthodox," says Johnson. "Demonstrating stability becomes key to winning new customers — it’s almost as though your technology becomes secondary."

Showing audited financial statements can be a big help. If you don’t have those, sharing your business plan can ease any fears customers may have. Says Johnson: "I told our first client that I had saved a year and one-half of necessary funds to pay my employees — and I was prepared to show them the checking account to prove it."

Once you land a contract and work with a customer for a period of time, your deliverables then become more important than proving economic stability, adds Johnson: "Strong deliverables translate into strong references."

Lack of an image

Having no image can be just as challenging as the wrong one, says Dan Miller, founder of BizTank, a Sarasota, Fla.-based consulting firm for high-growth entrepreneurs.

Miller’s first company, PlanetResume.com, was an early pioneer of online recruiting. "When we launched the company in 1994, the Internet was so new that our challenge wasn’t competing with established companies, but competing against a norm, a traditional way of doing business," he explains. "There was a high educational process to get buyers comfortable with this tool."

Miller had to sell his channel before he could begin to sell his service: He positioned the Web as a leaner, meaner medium for recruiting. Instead of buying expensive print ads or paying headhunters 20% to 30% of an employee’s first-year salary, companies could place as many ads as they wanted with PlanetResume.com for a flat annual fee of $10,000.

Rumor mill

Sometimes your biggest misperceptions are internal, observes Fred Lisy, head of Orbital Research, a $2 million Cleveland firm that develops aerospace and medical technologies.

Last year a senior manager resigned, and rumors began to fly among employees that Orbital was going under. "The fact was, Dan got a better job. However, there was a perception that something must be seriously wrong for him to leave," says Lisy. "I even began to hear rumors that I was going to lay people off."

Lisy handled the situation by talking with his staff on a one-on-one basis: "I’d say, ‘You probably know that Dan is leaving. What do you think about that?’ I tried to create a safe zone where employees could communicate their feelings freely — that’s how you find out about other rumors that may be circulating."

Another perception problem: One of Orbital’s top workers had sweated blood on a particular project, but when the formal presentation was made, his name was inadvertently left off the list of credits. Reading this as a sign that his head was on the chopping block, the employee was ready to resign.

Fortunately, Lisy talked him out of leaving, but the incident prompted him to do two things: Hold more recreational activities (such as a company barbeque, where he could tell employees and their families how much they are appreciated) and encourage managers to give more praise.

"After you grow beyond 10 employees (Orbital now has 24 full- and part-time employees), you must delegate more," says Lisy, noting that means paying more attention to communications. "And if you don’t keep individuals in the loop, by human nature, they’ll create the biggest bogeyman."

Cleaning up an industry

Brian Scudamore has turned a negative image into an opportunity. "The junk-removal business traditionally has been a mom-and-pop industry, and the public’s image is of old trucks with plywood sides and junk flying out of the back," says Scudamore, founder of 1-800-Got-Junk? in Vancouver, Canada.

Scudamore has built 1-800-Got-Junk? on four cornerstones: on-time service, up-front rates, friendly, uniformed drivers and clean shiny trucks. By setting new standards for junk removal, Scudamore has grown his company to more than $10 million in revenues and 200 employees.

Yet the industry’s negative image also makes it challenging to recruit the right kind of franchise partners. "We’re looking for sharp people who can build a business — not just someone who already has a truck and is willing to roll up his sleeves and get dirty," says Scudamore. Indeed, 1-800-Got-Junk’s most successful franchise partners have come from white-collar jobs.

"We’ve seen the perception start to change," says Scudamore. "But it takes a lot of education — through the media and word of mouth. The more we educate, the better partners we get."

More tales of the city

When John Lauer founded Rootlevel in 1997, recruiting employees to downtown Detroit was no easy feat. "People who grew up in the suburbs especially saw downtown as an awful place," says Lauer, CEO of the Web software development company with 60 employees and $7 million in revenues.

"There was fear of crime, fear they would be mugged," continues Lauer, recalling a phone interview with one candidate: "The woman sounded great, but apparently she didn’t realize we were based downtown. When I asked her to come in for an interview and she found out our address, her whole demeanor changed suddenly, and she backed out." Another time, Lauer had hired a technician, who got cold feet about working in the inner city the day before he was to start.

Lauer saw economic development as the solution and joined various organizations such as the chamber of commerce and the Detroit Economic Growth Corp. "In the last two years, downtown Detroit has undergone a renaissance of sorts," says Lauer. "General Motors has even moved its headquarters downtown, which has been a big help. Now it’s much easier to find talent. We’ve busted through the image problem."

Writer: TJ Becker.