The Leading Edge - Spring 2008 - (Page 7)

Rabins was now CEO of the public company but he found his daily duties revolved around issues of shareholder interest, not on developing and growing the software company. “It was horrible. I hated it. I liked talking to customers—actually being a software company,” he says. Rabins adds that the advance of the Internet in the mid-’90s also was opening up opportunities—creating an ideal platform for database applications that would be available across networks. Frustrated but seeing the potential for growth, the Rabins brothers repurchased their company around 2000. “We were lucky we were able to turn back the clock,” Richard Rabins says. Alpha Software was once again a private company with outside investors. “The significant benefit was not with ownership but day-to-day management,” Rabins says. Now, he and other executives can focus on product, customers and employees, the latter of which is particularly important in the software industry. “As a private company we don’t have to worry about a different set of people with a different agenda,” he says. Rabins says that entrepreneurs should realize that if they sell their company, they may not do well working within a bigger company. “We found ourselves lucky or blessed that we could buy it back and the public company was open to us purchasing it,” Rabins says. “Oh my gosh, we get a second shot here.” 3 biggeST mistakes 1 2 3 Business expert Alan stafford, author of “Making companies work,” knows about business mistakes. he has started four companies, holds two graduate business degrees and works with fortune 500 companies on staff development. According to stafford, the three biggest mistakes companies make are: failing to monitor labor costs in good times. when business turns down, that’s when most companies look to trim and tighten their labor force, a time when it is more difficult for their workers to find new jobs. hoarding cash in a start-up business. rather than creating an impact in the marketplace and getting exposure necessary to succeed, new companies save money until their monthly overhead consumes all the cash. trying to sell what their company makes instead of what customers want to buy. Microsoft, Apple and McDonald’s all have been guilty of doing this, stafford says. Prepared for a crowd A Singapore native who moved to Los Angeles in 2003, Kristy Choo decided she wasn’t getting any younger and should follow her dream. Without contacts, local friends or much business experience, she opened Jin Patisserie, a pastry shop and tea garden, in Los Angeles. She says she opened the business without knowing what was coming. She didn’t compare prices when she bought equipment and supplies, leading to high set-up costs. She overhired employees the first month. “It seemed like I was constantly making mistakes, from planning the menu and managing employees to dealing with customers,” Choo explains. Today, Choo considers herself lucky and THE LEADING EDGE wiser—staffing correctly, shopping wisely and understanding her clients better. Six months after opening, business picked up so Choo could cover expenses. Word of mouth plus a mention in LA Magazine have helped spur her on. In two years, she doubled her sales. One important lesson she learned is that no one was going to walk by her shop and decide to stop in. “No one walks in LA, they have to drive,” Choo says. Hubris hurts Bob Phibbs, who operates the Retail Doctor, found his own ego did him in. “I was hired by Hunter Douglas Window Fashions to do a four-hour training for their elite gallery dealers. At the break, an older guy came up to me, ‘I really like your sales program. How much would it cost to bring you to my store?’” Phibbs hedged, not wanting to divulge the price he charged the manufacturer. “Probably more than you can afford,” he told the man. Fast forward two years. The same manufacturer sent Phibbs on a national tour to give two-day intensive sales training for its best dealers. At a dealership in Morristown, New Jersey, he was about to begin when an older man came up. “Can I see you in the back,” he asked Phibbs. “Do you remember me? I’ll give you a little help. I was in your first group two years ago and came up to you at the end. Do you remember what you said to me when I asked, ‘How much would it be to bring you to my store?’” Suddenly, Phibbs remembered. “More than you can afford,” he replied, realizing how stupid it sounded. The man went on. “The fact you are here in my store now for free, at the manufacturers’ expense, I find funny. How did you know what I, as the business owner, could or couldn’t afford?” Phibbs calls that a groundbreaking moment for him. continued on page 8 7

Table of Contents Feed for the Digital Edition of The Leading Edge - Spring 2008

The Leading Edge - Spring 2008 Contents No Place To Go But Up Lessons from Harvard Bits & Pieces Conducting Business Outside the United States Top 10 Misconceptions of Doing Business in Ireland In a Nutshell: Q&A The Leading Edge Alliance

The Leading Edge - Spring 2008

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