I wrote a post the other day about how running our little coffeeshop serves as a constant reminder about the importance of customer service. Today’s post covers how it also teaches some very useful business lessons.

Consistency and quality – we’re a food and beverage business and that adds an extra onus – we need to make sure we don’t hurt anyone. If you’ve worked in the food business, you’ll know how important it is to stick to the regulations and standards to ensure the food you sell is safe and healthy. The keys and consistency and quality. We use the best ingredients we can afford and we have clearly documented systems to make sure we deliver the best product every time. Successful chefs and restaurants are constantly innovating, plus maintain a high level of consistency and quality.

Running a coffeeshop provides some valuable business lessons

Routine and boredom – we’re open seven days a week, rain or shine. And because consistency is important, it means we do the same things everyday. And because routine is boring after a while, a key goal is to monitor the business to ensure that boredom doesn’t lead to decline of standards. Many business, particularly those that rely on a constant repetition of regular tasks, suffer the same issues. A great business finds a way to rise above the daily humdrum and remain constantly excited and invigorated.

Juggling demands – I’ve had phone calls at 7.30pm on a Thursday night (the last one while I was standing in the queue at our local fish and chip shop) from a staff member saying she couldn’t work the next day or weekend, because she’s started a new job. So in fact she couldn’t work any more of her rostered hours. Man that gets my goat – Gen Y, don’t get me started. But irrespective of the staffer’s birth year, this is reality. In a hospitality business you juggle the demands of staff, suppliers, customers, regulators – and your family because hospitality can also mean non-family friendly hours. If you can develop systems and processes to keeps these balls in the air, you’ve acquired skills that will strengthen your ability to run any business.

Product and stock management – food and beverage are obviously a major cost component of any cafe alongside labor and rent. Our business is very seasonal – for example at the moment it’s winter in Melbourne so we do a brisk trade in soups. Come the warmer weather salads will become more popular. Because we rely heavily on regulars we are constantly looking for new dishes to add to the menu so as not to become stale. Plus we monitor the ongoing quality and relevance of existing dishes in case there’s something that should be quietly retired, or given a rest for a couple of months. It’s a process of constant review and renewal.

No matter what business you run, online or offline, these factors are critical:

• Maintain consistency in service and quality
• Develop a routine and don’t fall into the boredom trap
• Learn to juggle the demands on your time and energy
• Review and renew your product offerings on a regular basis

My reflections on my post yesterday about the value of outsourcing tasks in your online business. Many of our readers and book purchasers are bloggers or niche content site owners and if you’re like many of them, you’re probably struggling under the weight of not enough hours in the day and too much month at the end of the money. It may be opportune to take a good hard look at the world of outsourcing to remedy the situation.

2009 really is a great year to outsource. We’ve tested the water several times this year and unlike our past forays, all experiences have been great! So if you’re wondering how you can get your business and life back into balance, have a think about what you can outsource and test it out. At worst you’ll get some time back to use as you wish!

When we first started Arts Hub, David and I were very keen to make sure our readers had an opportunity to comment on and feedback on anything we ran on the site.

Giving our audience a chance to share their views was key for us – and we had a ‘Your Say’ section at the bottom of every news item or feature. In addition we encouraged readers to email their feedback on the site and its content through to us via info@

In the early days, circa 2000 to 2001 we received precious little feedback or comments on stories. People just weren’t that used to being asked their point-of-view or sharing it at that time. But as time went on and the membership built past a few thousand, we started to get a trickle of feedback from our members. Mainly, this took the form of useful comments or tips and leads. There was many a time when the Arts Hub News Editor would follow up on a particularly interesting ‘Your Say’. A real rip-snorter could become the foundation of a whole new news item or feature, giving added depth to a running issue.

I was having a wander around Problogger today, after David had said I simply must subscribe and this piece sent me back to the days when we would receive such hostile feedback at Arts Hub. Honestly, hostile feedback was rare but it’s amazing how it makes your blood boil when you read spiteful comments that are patently untrue about your site, content and the people you employ.

In my life before Arts Hub, I’d been a Regional Program Manager for ABC Regional Radio and we would often have quite off-the-wall callers ringing through either for ‘talkback’ on the Morning Program, or to just have a big whinge or to abuse an announcer. Given I was employed by the national broadcaster, it was never an option to respond back in kind, so our position was always to thank the caller for their feedback and to wish them a nice day.

Automatically we just implemented this same negative feedback response position at Arts Hub – long experience in a different arena has shown me that the best way to deal with seriously upset and negative people was to be kind, calm and generous and not get hooked into their drama. Quick closure of the discussion is also useful. And with email it’s so much easier to achieve this than with a phone call.

There is a really vast difference between agitated feedback that is caused by a difficulty on your site and outright abuse and ‘flaming’. Abusive communication really doesn’t warrant your considered attention, but upset comments about a real issue on your site, does.

I found it interesting to read that Dave in the Problogger article ultimately found responding in kind to these hostile attacks was just not worth the time and anguish involved, and that being in fear of a nutcase knocking down his door was just not worth it.

Life’s too short to indulge nastiness, so shutdown the flamers with a polite message and wish them well on their journey, or even better, do what David does, just ignore them.

If you want to find out more about the 5 types of members that we experienced at Arts Hub, please check out our book Niche Content Millionaire.

Josh Hanagarne from World’s Strongest Librarian has written an excellent guest post on ProBlogger about why having a mentor in your business is a terrific idea. I dropped a comment onto the post and, slightly tweaked and augmented, it appears below.

As an entrepreneur having a mentor is sound and excellent advice. We’ve had a couple of mentors in our business life, but one particularly has guided us for many years. Terry is a prominent person in the arts scene, indeed, his previous role as Chair of the Australian Council for Arts positioned him pretty much one of the most powerful figures in the Australian arts industry. He’s still seen as a maven and opinion leader, and has access and contacts at the highest level across a number of industry areas, including media, communications and technology.

We originally mustered up courage to ask him to be a guest columnist on our Arts Hub web site. That gave us a great chance to meet face to face, talk about our business, and discover that he seemed to have a real interest in what we were doing with our online company.

Mentor was a wise teacher in Greek mythology

After a while we then mustered up the courage and asked Terry to be our non-exec Chairman – and gratifyingly he accepted, and guided us through the next three years, and the eventual sale of the business to a group of investors.

These days, having known him for many years, he’s now one of our best friends, and godfather to our youngest daughter. We continue to trust him completely for intuitive, lateral thinking advice – or just a cheer-up session over red wine if we’re feeling down.

Terry’s support has always been unequivocal. In our Niche Content Millionaire book I tell a story about I can recall attending an arts management forum in Brisbane one time. The usual gabfest, with fifty or so arty types from around the country gathered for a conference or something. Terry was presenting a report he’d been working on. Without pause he managed to segue from the report to Arts Hub, a completely unrelated topic, and declare, in all seriousness, that the doors to the room were to be locked, and exit could only be achieved if everyone subscribed to Arts Hub! 50 arts mangers all sat up and took notice. And yes, we sold some subscriptions that day!

We’d completely and heartily recommend finding a mentor for you and your business. As we say in Niche Content Millionaire:

It’s possible and even likely that you will face a number of obstacles in the start-up and growth of your online niche content business. If you take just one piece of advice from this book, then please seek out the very best business mentor that you personally like and respect and get them on your team. It is very easy to learn from those who we respect, like and understand – there is a flow to the relationship. Make sure you have at least one of these people on your support team – they are worth their weight in gold.

And don’t be scared to aim high. It surprised us that Terry our mentor, with such a high flying life, could be interested in our little internet venture. In fact, it turned out we were exactly the sort of business he loved to be involved with.

Best decision of our lives was to arrange the original appointment all those years ago.

The best possible information service is one that organizes or re-organizes a marketplace in a way hitherto unseen. It’s a key reason why Arts Hub was a success.

The arts is a fragmented, dispersed industry, there are all the different genres – performing arts, visual arts, music and so on, each with many smaller sub-groups. Artists often work as individuals, or in very small groups. Arts businesses tend to the small end of the size scale. It’s this fragmentation both through genre and location that enabled Arts Hub to position itself as the single consistent information source across the industry, heightening its legitimacy and appeal.

Any business can enter a marketplace, it’s a rarer business that can create or organize a marketplace by adopting an innovative approach to way in which the business addresses the needs of customers. The trick is to tap into latent demand – people who didn’t know they need the service until the service is presented to them in a context that they comprehend.

Copycat businesses abound on and offline. But businesses that create a new marketplace where one did not previously exist are far fewer.

You challenge must always be to take a second look at your chosen area or niche. Of course a competitor analysis is a good starting point, but you need to move beyond a simple assessment of their current product offerings, and try casting a fresh eye across the equation of products and customers. Perhaps you could repurpose a product and introduce it to a hitherto untapped customer set? How can you create a new way to deliver the goods or services people need?

With our Arts Hub online business our keys to success in the market were two fold:

1. We produced the first ever comprehensive arts job advertisement service
2. We produced the first ever national, cross-discipline news service for the arts

Interestingly we watched competitors open up new websites, but always fail. For example, someone launched a subscription-based copy of Arts Hub but focused solely on the dance sector. They gently faded away after a few months. The market wasn’t large enough, we were already covering much of the same content, and they didn’t have the depth or diversity to grow beyond their very small niche.

The internet has proven a fascinating enabler of marketplaces that could never have existed previously. But now after ten or so more years of the growth of internet commerce the original markets have started to become saturated and stale. Who needs another real estate, jobs or finance site? The winners will be the new businesses that take a new approach, and challenge the old timers at their own game by reinventing their products and presenting them in a new way to a new coalescing of customer niches.

Image credit: Flickr danielbroche

Once revenue flows, and after usually massive efforts on the part of the founder or founders of a new venture, the easiest red herring to fall for is that you need to hire a bunch of staff to help you run and build this business. The truth is that hiring staff is very tricky indeed and most people are not capable of simply hitting the ground running in a start-up. Very few new hires we’ve made (except a handful of exceptional people) were dedicated and determined enough to learn their role quickly and to take leadership of their area of responsibility. We still remember the hundreds of applications we got for a couple of intern positions we advertised in our own Jobs Bulletin – we sifted through them all, discarding the strangest, most off-the-wall and narrowed down to a few that looked okay.

Be careful hiring employees who could become a problem

Of the two people we hired, neither was right for our business, so instead of doing what we should have done at the end of their summer intern period, and let them go – we hired them in part-time positions. Even though hiring people is time-consuming, often confusing and always risky, if you truly need an extra set of hands, then instead of just making do with not-quite-right hires, we advise you to go through the process of recruiting until you do find staff you’re convinced can and will do what you’re asking in the role on offer. And of course, who actually want the job!

Don’t be afraid to only offer casual positions until you find the right candidate fit for your business, and your way of doing business. There is so much management material written about the employer’s need to look after, in every way humanly possible, the needs of the employee, but we found that once we stopped focusing on being great employers and focused more on having great people around us who also believed in our product, that our business functioned increasingly well, turned from unprofitable to massively profitable, and we had much more fun (and so did our staff).

In the early days of Arts Hub we were so humbled by the fact that our little Internet venture was actually working, people were signing up for new memberships and revenue was growing month-on-month, that we just gave jobs to not necessarily deserving workers.

Another part of keeping it simple is that if you do need to hire people in your business (and we would advocate automating as many business processes as possible before you do that) make sure you’re completely clear on the role and what kind of person you need to fill it. The right person in the right job with the right attitude will help the business to run smoothly. Ill-fitting staff just consume way more of your time and the company’s resource than is necessary – generally this means they’re there for the wrong reasons. It was a big shock to us to find out the cold truth that most of the people we hired in the early days of Arts Hub just took the job because we were a rather sexy, new Internet business and working for us made them look cool to their friends. Beyond that none of them had anything meaningful to offer. Don’t carry passengers. Hire the right people or don’t hire at all.

Image credit: Flickr mio_please

An article by Patricio Robles on econsultancy.com the other week “HuffPo founder: subscription business model is for porn only” covered some of the reasons why subscription websites are a valid business model. Patricio was responding to Arianna Huffington, founder of The Huffington Post and her ill-advised comments that subscription sites are only good for weird porn (We blogged about this as well).

Patricio’s list was a good start, so with acknowledgement to her, we’ve tried to flesh out the list to come up with 10 good reasons why we reckon membership websites are the way to go.

1. Anyone can give it a try – thanks to products like Wordpress and PayPal anyone can start a paid membership website within minutes. The technology has come of age, as opposed to when we started out in the membership website business nearly ten years ago. We didn’t have anything like the resources available. Now it’s point and click easy. The technology barrier has been removed.

2. Small web sites struggle to earn from advertising – it’s a fact of life that advertising is founded around weight of numbers. Commercial, advertising driven media is an eyeballs game – it’s about creating content that you believe will attract the maximum number of viewers, the flogging off that audience to advertisers. Google Adsense and other online ad networks have created opportunities for small websites to earn revenue from advertising, but the reality is that you still need massive amounts of traffic to really make money from a pure advertising model.

3. Predictable business revenues – whether you offer monthly or annual memberships, you can predict pretty accurately your revenues over a protracted period of time, especially once you’ve been operating your website for a while and have a handle on renewal rates, attrition and other key performance indicators.

4. Easier to sell to customers than products – our main product, indeed only product, on this web site is our eBook, Niche Content Millionaire. And sales are hard work – one book at a time as Fiona likes to say (well, a dozen at a time, but get my drift). We have to pitch, and convince, visitors as to the merit of buying the book. Sure, we can offer discounts and other incentives, but it’s a one time purchase. Pitching a membership, in our experience, is easier. You are able to make promises over time about the benefits of membership, the entry price is usually much lower than a single sale product, and you can use techniques such as a 30 day trial to tip a potential customer over the purchase line.

5. Insulated against changing conditions – everyone is now very sensitive to how the world is changing, times are tough in most markets and parts of the world. Membership websites that successfully lock customers into a loyal pattern of membership and behaviour can ride out short term downturns, most especially if you successfully adapt your content and service to suit the times. If your members are nervous about the world around them, then you can be the stable voice that hold their hands over the bumps and dips.

6. Easy to understand business dynamics – I can successfully describe a membership website business model to my eight year old. The metrics involved are distinct, measurable and open to meaningful analysis. You can calculate renewal rates, cost of acquisition, life time value.

7. Infinite possibilities – if you can think of a topic, you can create a membership website around it. The niches are endless, and with the global internet audience numbering hundreds of millions from every country and culture, there’s an audience out there providing you can find a way to connect with them.

8. The little people can change the world – you, an internet connection and a membership website can change the world – or at least your little part of the world. You can make a difference to a group of people – your members – if you provide a valuable, useful tool to help them in their personal or professional lives. If you are delivering what they want, when they need it, you are providing a service that can enable them to lead better lives, to be more successful, to achieve their goals. In our case a key service we provided was to help people find a job. And we were always meeting people who had found employment via our website.

9. Highly rewarding for you personally – my absolute favourite part of owning a membership website was the opportunity to interact with our members. Once in a while we’d hold offline events where members could come together, have a few drinks, swap stories, form new connections and generally socialize. I personally found spending time with our members enormously rewarding.

10. Easier to sell to a purchaser – taking into account most of the previous nine points, when time comes to sell your website you’ll find it extremely easy to document, describe and demonstrate the benefits of your website to a potential purchaser. Locked in revenue, loyal customers and quality content equal a winning combination in the eyes of investors. Even if they are not expert in your particular content niche, a good business person can still grasp high quality fundamentals, yielding a stronger payout for you.

People keep asking us what are the secrets to success of great membership web site. Which got me thinking, what are the secrets to failure! I thought about trying to string this out into a great big long list of stuff, but decided to focus on a small number of key issues that in our experience are the downfall of many a membership website. We’ve learnt the hardway that if you take your eye off the ball, all your previous success counts for nought as you crash back to earth.

1. Poor content – stuff this one up and your lovely membership website will be stillborn. Content is what your members pay for, and content – good quality content – is what they must receive. If your content is not valuable to your members, they won’t pay. Easy as that. Know your audience, know their desires, wants and needs, and write tailored to that formula.

2. Veering off track, losing focus – we went down this path once or twice. We thought our success meant we could steer a wider course, we could blend in a wider offering and thus expand our audience. Sure, worked for a while, but then our original, core audience started getting fidgety, they felt we were digressing too much and too often, and on came the complaints.

3. Wrong price points/policy – pricing policy is an artform. Too expensive and people will think twice, too cheap and you risk under-valuing the product and leaving no room to move on discounts and offers. And some customers will be like me, suspicious of a low price. Would you buy a ‘Rolex’ for $10? Of course not.

4. Losing the personal touch – when you only have a few hundred members, staying on top of their individual requests and messages is possible – but what happens when you have 25,000 members like we used to? That becomes a communication challenge. Yet the personal touch is like gold with member retention. To truly be a membership site you must make customers feel like members.

5. Taking the short term view – I’ve been known to sound off about short sighted internet marketers plenty of times before now. And it continues to drive me mad. Apparently some marketers think hanging on to a member for six months represents success. I think it equals abject failure. Try 6 years or more, then you’ve captured my attention. Always think long term, and maintain the energy – so much of managing a successful membership site seems boring because repetition and consistency are the crucial keys. Finding the formula to success may be hard, but holding to the formula is harder. But hey, who minds a little boredom if it is a symbol of success.