Exclusive Q&A with Ken Yancey, CEO of SCORE

Ken Yancey is the CEO of SCORE, a nonprofit organization dedicated to helping small business grow and thrive. CEO since 1993, Ken leads the organization’s 364 chapters and 13,000 volunteer mentors lending their expertise and guidance to small businesses across the country.

First off, tell us about SCORE and your work with small businesses.
SCORE is a volunteer organization made up of businessmen and women who devote their time, talent, experience and energy to small business owners and those that would like to start a business. We provide counseling, coaching, mentoring, hand-holding, cheerleading—pick the term that fits for any small business owner on any topic that involves starting, growing, managing, selling or buying a business. And we also counsel face-to-face from any of our 360 offices or online via email or Skype.

The second thing that we do is a series of workshops or seminars. They’re available in any of the 360 chapters across the country or online. We have a series of about 40 online workshops and then regularly do live webinars on a variety of different topics, typically using some of our partners. Last year, we did over 1,100 total workshops and served almost 400,000 different businesses and individuals.

To get started with SCORE, you can visit score.org, find your nearest SCORE chapter, send them a note or pick up the phone and call and make an appointment [with an] experienced mentor. So many small business owners don’t have a sounding board in their office…and what SCORE volunteers provide is that sounding board, that mentor relationship, a little extra confidence to assure you that you’re on the right track or maybe ask questions that result in making a bit of a detour on an occasional basis.

What are one or two things small business owners should be doing if they want to take their business to the next level? 
Business is so diverse and the types of businesses are so diverse that I think there’s really only one “one-size-fits-all” answer to that question. And that’s plan. If you want to take your business to the next level, you need to think through what that means. Does that mean a new location? A new product line? New customers? Does it mean expanding or growing your share of wallet with existing customers? Does it mean greater efficiencies in the management of your processes? Maybe taking it to the next level is selling the business or franchising it. You really need to think through what that next level looks like.

Once you’ve created that vision, then you need to create a plan that will allow you to get there. What are the things that you need to do today, tomorrow and the next day that will allow you to achieve that next level of success? You need to do a really solid evaluation and create a plan. A great way to do that is with the help of a mentor, whether you get that from SCORE or from the [SBA’s] Small Business Development Centers and Women’s Business Centers or from a community business leader you have a lot of respect for. Those are people that you should include in your dialogue as you think through what it is want to accomplish and how you’re going to do it.

What is a mistake that small businesses may be making that they’re not even aware of? 
I think often businesses underestimate the amount of capital it’s going to take to either start or grow. I think that businesses often don’t pay enough attention to their financials, their balance sheets, their income statements and their cash flow. Often, a small business owner who’s so busy running their business doesn’t take the time to maybe even produce those reports, much less use them to make projections or use them as a reason to change course.

I think particularly in the environment we’re in—we’ve been challenged for the last seven years from an economic perspective—if you’re not really doing a good job of managing the numbers and understanding your sales and your cash flow and your receivables turn, and all of those other great financial metrics, you’re going to be challenged in the future.

What are some inexpensive ways to market a small business? 
Let’s talk about marketing in terms of what you want to accomplish, which is get more customers and more sales. The first thing that we would tell any small business owner is to go to your existing customers. Ask for referrals. See if there’s more business that you can get from them. What can you do to expand your share of wallet with that single customer? That is often the easiest thing to do.

Clearly there are some really interesting opportunities with social media these days. The better relationship that you create with your client, the more trusted you’re going to be as a vendor or a service provider, and that creates opportunities for you to grow your sales and to increase you customers base. Simple things like communicating via Twitter can be really effective. When people come in, ask them to follow you. Don’t just send them a note and [with a] link. Say, “please follow me so I can keep you updated on discounts or specials or sales or the cyclical timing of particular inventory that you’re interested in.” The Twitter opportunity has really become an interesting word-of-mouth replacement.

I also think being active in your community is great. Clearly Patch gives you a great foothold in the community because it’s all about your community and participating and getting involved. Deepening and broadening those relationships in your community is so important.

Why do you think it’s important for a business to be involved with and connected to its surrounding community? 
From a business standpoint, it does help you create better, stronger, deeper relationships with the clients in your community. And I think people want to do business with other people that are invested in the success of not just themselves, but the community overall. People want to support businesses that are active in the community—maybe the business is supporting their local Girl Scout troop, maybe they’re sponsoring a Little League baseball team, maybe they’re active in the arts—all of those things are important to a healthy community.

It’s also a great way to involve your employees, and you can even involve your clients. Ask them to be involved in some sort of a program that the community’s putting on, whether it’s the arts or maybe it’s working with the local food bank over the holidays, maybe it’s Toys for Tots. You can use community involvement to engage clients beyond just a sale and service. And I think that’s also a great way to develop relationships that result in better sales, a larger, more stable customer base, referrals and all that goes with it.

What are the trends for 2013 that a small business should be aware of and planning against?
There remains a lot of uncertainty in the market related to a number of issues, including politics, weather, healthcare, etc. I think it’s important, again, to plan. You have to know what you’re going do in the event that X occurs.

I also think this year every company needs to understand how the new healthcare laws are going to impact them. Another thing, you’ve seen over the last few years, there have been a number of tax incentives that have become available for small businesses. You need to know what those are and take advantage of them. Make a quick call to your CPA, spend a little time in the evening on Google or Bing, or regularly review Patch to see what’s going on in your local community to see what people are saying about healthcare and other things—these are great places to learn and gather information.

If a small business had $500 left in its monthly budget at the end of the month, how would you recommend they spend it?
I would spend it on planning for customer acquisition and on existing customers. What we see in SCORE, and we hear from hundreds of thousands of businesses a year, most of those businesses don’t want a loan, they don’t want more debt, they don’t need equity. What they need are customers. They need people to spend money in their business, buying their services and products. So I would spend it on things that would help me create quality, reoccurring customers.

If you had just one piece of advice for small business owners, what would it be?
Plan. I think planning is really important. There are a lot of people now saying that you don’t have to have a business plan. A plan is nothing more than a roadmap. And you can take detours as much as you want—it’s your plan. Change it every year. But a plan helps you think through your business, your customers, the environment that you’re in, the staffing requirements, the dollars it’s going to take, the budgets, what type of sales group you need and what to expect in terms of access to credit or debt. There’s a quote [that goes] “Failing to plan is planning to fail.” Planning for any business is really, really important.