On Volunteering Negative Information When Selling

Now that TerraCycle is almost a decade old and operating in 22 countries, I have realized how much sales styles differ throughout the world, especially in Europe. While the American style of sales is typically gung ho â€" energetic and positive - the European style is quite different, much more conservative.

This hit me when, after a sales pitch in Germany, our client said, “Tom, we'd love for you to present TerraCycle to our leadership team, but please be less American. Please don't be excited and just present the facts.” I thought to myself, Wow, how do you sell without being passionate about the product or service you are selling?

Whether you are selling to a new client or persuading an existing client to continue buying, sales is the critical driver of your business's growth. Naturally, when selling, we spend most, if not all, of our time highlighting the positive attributes of our product or service. The golden rules of su ccessful selling are to solve an existing problem for your client with a compelling proposition. Then communicate that proposition clearly, simply and passionately. And always be closing! But this raises a question: How much negative information should we volunteer?

When selling hamburgers, should the restaurant owner note that the meat came from a slaughterhouse and disclose any associated health issues? When selling public relations services, should a P.R. agency discuss its failed campaigns or only the good ones?

After a decade of successful sales, I do think that there is a place for disclosing negative information. But it should be done wisely and in moderation. Here are three things to keep in mind:

If you think the client may know of something negative, own it. The way to do this is to address it up front in your meeting, before the client raises it. And you should address it more aggressively than your client would, if he or she were bringing it up. When you do this, it's best to have a solution ready to offer. Such action will show your client that you don't shy away from challenges; you take responsibility for them. At TerraCycle, every time I have done this, it has been successful and built trust.

Always talk about your competition positively. Competition, while negative to your business, is a fact of life. My suggestion is to be fair and positive. This will play well with your clients as they see that you are looking out for their best interests. This, too, will build credibility and trust. TerraCycle doesn't have competitors the way most businesses do, but there are other services that our clients perceive to be in the same “bucket” as TerraCycle.

One example is RecycleBank, which manages recycling rewards programs. Whenever we are asked about RecycleBank,we always say positive things - they are indeed our friends. But we also try to explain the differences between our two propositions (we help bra nds recycle previously nonrecyclable products or packaging). Then we let the client decide. Look, clients can always get this information themselves; it builds credibility when, after a sales meeting, they do their own research and come up with the same facts.

Sprinkle some negatives during your pitch. We consider TerraCycle a premium service. For that reason, we always highlight that our cost is higher than other solutions - such as sending waste to landfill. But then we emphasize that the benefits of working with us may be worth the expense. Of course, there is a fine line - you can volunteer too much negative information and kill the deal. Negative information is like salt on one's food. It should be applied in moderation.

In the 22 countries where we operate, I have found a wide range of approaches to handling negative information. While most of our sales teams do a great job with the first two points, they often struggle with the third. This is especially tr ue of people with less sales experience, and the most striking example is in Europe. There, our sales teams typically volunteer too much negative information in their pitches. They cross that fine line, and when they do, their closing rates decline.

We're trying to coach them to be a little more American in their approach.

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.

This Week in Small Business: Good News for the Next President

What's affecting me, my clients and other small-business owners this week.

In Case You Forgot

There's an election Tuesday, and this little girl can't wait for it be over.

The Big Story: Storm Pummels Small Businesses

What could be the most damaging storm ever wreaks havoc on small businesses on the East Coast (this was the most accurate forecast of them all). In New York, big businesses shut while small businesses stayed open. For some small businesses there are costs, but for others there are opportunities. Subway-dependent businesses saw their traffic slow. The storm could cost more than $50 billion and help the economy but others believe it will not help. Jared Bernstein offered some cold, wet comfort. In the middle of it all, American Apparel made an odd advertising choice and a model picked a poor time to model. The storm caused a disturbance in the airline force. The cloud took a beating. Office Depot offered free office space and services to affected businesses. Brooklyn got smug. Mayor Bloomberg's interpreter stole hearts online. And a biker toured the damage.

The Economy: Greece Is the Word

The latest unemployment report is good news for Tuesday's winner. As the United States approaches its borrowing ceiling by year end, Ezra Klein believes the “fiscal cliff” will bring on a faster contraction than Greece's. Edward Hadas says economists should just admit their ignorance. Consumer spending jumps. Home prices continue to increase. Gallup's economic confidence and the Conference Board's consumer confidence are the best since 2008. But growth in the Texas region slows and manufacturing in the Chicago region drops. General Motors' profit falls. October's factory activity hits a 37-month low. Intuit reports a decline in small-business employment and revenue. Did ADP grossly overstate job growth over the past 12 months? Online labor demand (pdf) falls. The Restaurant Performance Index declines. SurePa yroll's Small Business Scorecard shows a 15-point drop in optimism.

Your People: Digital Literacy Is Essential

Sarah Rowson has some tips for running a multicultural work environment, including: “Even if asking questions reveals ignorance on your part, taking steps to correct that ignorance is still better than continuing to grope about blindly.” Lars Lofgren explains how to recruit a world-class marketer to your start-up. Silicon Valley employers go wild with lavish benefits for their employees. These are five out-of-the-box ideas from Zappos for keeping employees engaged. This business wants to keep solicitors away unless they're selling Girl Scout cookies. Here are seven reasons people hate being in meetings with you, but don't worry â€" this company is working on a way to beam you up. Rick Broida tests another teleconference solution. A new report finds most small businesses consider digital literacy essential for new h ires.

Management: Managing Disruptions From Home

Here are 33 reasons you're not getting anything done. Julien Smith lists the 12 phases of a successful project. The folks at EnMast put together some business horror stories in honor of Halloween. Here's how to manage disruptions when working from home. Jim Smith lists six questions a small business should ask itself, including: “Are we spending enough time studying our customer needs?” Here are some things to consider when buying or selling a business.

Online Marketing: Finding Early Adopters

This is how to use photo-sharing apps to increase your online presence. Adrian Aoun thinks the future of search may look more like Yahoo than Google. Twenty-four percent of consumers who conduct “local” searches, according to a new white paper, are tech-savvy early adopters who own multiple mobile devices, use mobile shopping apps, purchase daily deals and post reviews of businesses more than the average p opulation. A small-business study finds a disconnect between mobile device use and mobile security preparedness. Jeff Bullas asks if your business is right for Pinterest and lists his top 10 Pinterest boards. A new survey finds most small-business owners are not capitalizing on social media while another shows that small businesses are investing more in social media but juggling resources. Zachary Knight thinks being online has become so common that some people no longer identify it as being online (kind of like these people). Facebook now enables advertisers to target specific mobile devices.

Marketing: Ruining Your Proposals

Jim Connolly learns some lessons from Jo Average. Jeff Korhan shares three ways content marketing can make every business better. Sydni Craig-Hart has some ideas for getting prospects to sign up for your teleseminars and webinars. These are 10 small daily habits to help you manage and build your network. Here are three marketing ideas inspi red by Apple. A Crowdspring blogger explains how to slice and dice your customer service data. Becky McCray wonders if you're treating all of your customers the same. This is how your high school English class is ruining your proposals.

Starting Up: Go to Stanford

In this video, Roger Bicknell shares his best small-business ideas for college students. But to get your idea financed you might want to attend Stanford (where you will not find students taking notes like this). Here are a bunch of business ideas that cost less than $20. Dane Carlson has 20 small-business ideas for small towns. Entrepreneurs share their stories of what start-up life is really like. In Las Vegas a fund is helping start-ups. A start-up hub emerges in Chicago and Denver's Startup Week attracts 3,500. While Dharmesh Shah shares the classy way to get media coverage for your start-up, here's how to tell if your start-up needs a public relations firm. Adam Gottlieb explains the various types o f alternative financing. A start-up that bills itself as an alternative to Groupon raises $5 million.

Around the Country: Haunted in Denver

Pitney Bowes and Google plan a marketing event for small businesses in New York City. New Orleans plans a series of informational meetings for small-business owners. Los Angeles will be the site of a Small Business Expo on Wednesday. A small business in Denver is hailed as one of the nation's top haunted houses. FedEx plans a $1 million gift card giveaway for Small Business Saturday. This infographic explains what small businesses mean to everyone. A company that sells software to monitor networks and servers tops a list of America's best small companies.

Around the World: Performing Tricks for Six Figures

Japan's factory output falls. Britain gets 4G, and the Olympics help put an end to its recession. Retail sales in Spain plunge while German retail sales increase for the second month in a row. Euro zone unemploy ment hits a new high. A baby robot plans to conquer the world. An elephant speaks Korean. The world's first commercial-scale vertical farm opens in Singapore. Canada's economy shrinks. A mentalist and illusionist makes $350,000 traveling around the world performing tricks and reading minds. So far, 108 billion people have been born.

Technology: Is Buying an iPhone Irresponsible?

IBM has a chip breakthrough. Here are six ways the Surface beats the iPad, and here are five reasons buying an iPhone is financially irresponsible. Both Microsoft and Google announce new smartphones. Sherisa Aguirre wonders if e-mail is friend or foe, and here's how to keep e-mail from driving you crazy. George Lucas sells Star Wars to Disney (it was a tax move!) while the military prepares for a zombie apocalypse. The bar code turns 60. Ryan Pinkham suggests eight things small businesses should know about the future of mobile marketing, like: “Most mobile searches are location-based.†

Tweets of the Week

‏@jasonillian: Entrepreneurs don't see the glass as half-full or half-empty. They see the glass as completely full in the future.

@ConsistencyKing: Why survey customers if you are not going to follow-up? This is a great question that 100% of your customers are asking under their breath.

@KingAndJames: Ok when you have to put your cell phone call on hold so you can open your Trick or Treat bag, you're too old for #Halloween

The Week's Bests

Donna Maria shares advice for picking yourself up when you're discouraged: “Run toward something. Maybe things didn't work out the way you thought they would. You didn't win the competition. You didn't get the sale. If you are an entrepreneur, set some new business goals. More money won't solve all of your problems, but it will make them easier to deal with. Use your business to create new ways to generate more excitement, enthusiasm and income in your life. As you do this, your confidence will increase. As your confidence increases, so will your ability to deal with the next gobsmack.”

Matthew Torn says to let people work for you and “offer a high commission even if you may feel a little uncomfortable doing so. Put yourself in the position of somebody looking for a product or service to sell. Obviously, their time is as important to them as yours is to you. They want to receive the most reward for their investment, and they're drawn to high commissions. Of course, the best and brightest marketers are not making decisions solely on commission rates. But if you've taken care of the first step and created something of true value, your offer will have a dual shine.”

This Week's Question: What will you do differently before the next storm?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

The Times\'s Washington Bureau Chief, and Legions of Others, in Defense of Nate Silver

Nate Silver, author of the FiveThirtyEight blog on NYTimes.com, may be under attack from some people, as I noted in a post on Thursday but he also has many defenders.

Hundreds of them wrote to me in e-mails, in Twitter messages and in comments on the blog to say that they vehemently disagreed with my criticism of Mr. Silver's offer of a wager to a talk show host on the outcome of the presidential election.

Some questioned my intelligence, sanity or sense of fun. Some said that by criticizing the wager offer, I encouraged the unfair critics of his overall methods.

Others questioned the logic of my specific complaint. I'll address the latter here, then turn over the floor to the Times's Washington bureau chief, David Leonhardt.

First off, I want to state clearly that I see nothing in Mr. Silver's writing that suggests his work has partisan motivations. I also will repeat that those who choose to equate probability and a close political race are wil dly missing the point. To use everyone's favorite new word, they are innumerate.

But here is the problem: Mr. Silver's offering a wager could be interpreted, by critics who already paint him as partisan, as evidence that he has a rooting interest in a particular outcome. Yes, even though the winnings would go to charity and even though he was betting to make a point about his model. There may not be a true conflict of interest, but there is an appearance of one. And appearance matters - it affects credibility, which is at the heart of good journalism. (There is a school of thought that rejects this idea and many people articulated that well on Friday.)

Put more broadly: Journalists shouldn't bet on the outcome of news events they cover because betting raises the reasonable idea that they have a stake in how those news events turn out - or that they even might try to make the events take a particular course. That's why business repo rters are not allowed to trade stock on companies they cover.

The Wall Street Journal, for example, has a strict anti-betting policy.

One of the most thoughtful respondents to my post was Mr. Leonhardt. While not defending the wager offer, he pointed out that Mr. Silver has a public record of taking a nonpartisan approach to polling analysis. He wrote:

When liberals were claiming momentum in the final days of the recall campaign against Scott Walker in Wisconsin, Nate threw cold water on the argument and said Walker remained a heavy favorite. Walker won, of course. Nate's model also suggested that the G.O.P. House takeover in 2010 and Scott Brown's win in 2010 were likely to happen.

None of this means Obama will win. A 20 percent chance is a serious chance. The system would be flawed if 80 percent favorites won 100 percent of the time. To put it another way, a pair of dice isn't broken if it rolls a seven.

The larger point is that Nate's work has long earned the benefit of the doubt about its goal: to produce the best polling analysis possible, given the inherent noise in polls and the inherent uncertainty of life.

Later, after conferring with Mr. Silver, he also offered examples of cases in which underdogs in his model have gone on to win, noting that these also reflect no partisan pattern. (As Mr. Leonhardt notes, underdogs “should” win sometimes, “just as baseball batters sometime get hits.” ) The examples follow:

In 2008, Mr. Silver had John McCain, Republican, favored in Indiana, and Barack Obama won.

In 2009, he had gay marriage favored to pass in Maine, and it did not.

In 2010, he had Sharron Angle, Republican, favored in Nevada, and Harry Reid won.

In 2010, he had Ken Buck, Republican, favored in Colorado, and Michael Bennet won.

In 2010, he had the Tea Party Republican, Joe Miller, favored in the Alaska Senate race, and the moderate Republican (Lisa Murkowski) won.

In 2010, he had Bill Brady, Republican, favored in the Illinois governor's race, and Pat Quinn won.

In 2010, he had Republicans projected to win 55 House seats, and they won 63.

There were three cases in which Mr. Silver had Mitt Romney favored in the primaries, but Rick Santorum won.

Mr. Leonhardt adds this praise to his commentary on Mr. Silver:

Nate has done a public service through his work. He didn't cause people to start paying attention to polls. He instead helped people who were already paying attention to polls understand that individual polls can be so noisy as to be directionally misleading - and yet even flawed individual polls often have both noise and information. There is no pollster, no political scientist and no other writer who has a better recent public record of analyzing elections data than Nate. It's not perfect, as he himself tries to convey with his emp hasis on uncertainty and humility. But it's serious, impressive and nonpartisan, and the same is not true of many of his critics' claims.

It's well said and I find much to agree with there. I haven't changed my mind about the wisdom of publicly offering a wager to a television talk show host, but I'll admit that it's a quibble in the overall picture.

And, on a personal note, I want to acknowledge Mr. Silver's generous response to me on Twitter on Friday morning. Clearly, this is someone who understands what it feels like to be under siege.

Assessing the Impact of Health Care Reform on New Businesses In Massachusetts

A couple of weeks ago, when The Agenda discussed Jon Stewart's musings on creating a safety net for entrepreneurial risk-taking, we touched briefly on how health insurance reform might spur people to go out on a limb and open a new business. “What about the risk of, you're afraid to leave your job and be an entrepreneur because that's where your health insurance is?” Mr. Stewart asked his “Daily Show” guest, Austan Goolsbee, the former Obama administration economist.

That led to this question from an Agenda reader, Joyce Carpenter, who wrote that she lives near Boston: “Is there any data from Massachusetts to show that Romney-care a k a Obama-care would help mitigate the risk and encourage entrepreneurship?” Excellent question, Ms. Carpenter, and one we'll explore here. (Spoiler alert: the answer will be disappointingly murky.)

To begin to answer the question, you have to know first whether the health insurance le gislation signed by Governor Mitt Romney in 2006 has in fact lowered the cost of individual insurance in Massachusetts enough to make it attractive to prospective entrepreneurs. That is according to Yasuyuki Motoyama, senior scholar at the Ewing Marion Kauffman Foundation, which focuses on issues related to entrepreneurship. For this, Mr. Motoyama referred us to a study of the Massachusetts health insurance market by economists John Graves of Vanderbilt University and Jonathan Gruber of MIT. (As an adviser to then-Governor Romney, Mr. Gruber helped devise the Massachusetts health reform law.)

The study looked at the average premiums for non-group health insurance plans in each state from 2006, when Massachusetts began to implement the new law, through 2009. (The premium costs were compiled by the Association for Health Insurance Plans, a trade association.) In those years, the average cost of individual coverage grew by 14 percent across the country, but in Massachuset ts, premiums fell by more than 21 percent. For family plans, the difference was even more stark: across the United States, premiums rose by around 13 percent; in Massachusetts, they fell by nearly 40 percent. “The estimates show enormous reductions in Massachusetts over this period relative to the national average,” the study's authors wrote.

“There's no way - there's no way - that that health care law doesn't free people up to start their own companies,” said Robert Nakosteen, a professor at the Isenberg School of Management of the University of Massachusetts Amherst. “It's absolutely certain, to a 100-percent degree of probability, that the health care law in Massachusetts has created an environment where individuals can quit their jobs to take the risk to start new companies.”

There is also, however, no way to verify this with a look at data. According to figures from the Census Bureau, entrepreneurs in Massachusetts and across the country created more new companies in each year from 2002 to 2006, but the rate of growth in new Massachusetts companies lagged far behind the rate for the entire United States - and even behind the rate of growth in neighboring New Hampshire and Rhode Island. From 2006 to 2010, the last year for which figures are available, the number of companies under a year old recorded by the Census Bureau fell across the United States and in Massachusetts at roughly the same rate. In New Hampshire and Rhode Island, the rate of start-ups fell even faster.

Professor Michael Ash, chairman of the economics department at the University of Massachusetts Amherst sees a silver lining for the state in these figures. From 2002 to 2010, he said, “Massachusetts went from pretty week performance to bad performance, but the U.S. and the rest of New England went from better-than-Massachusetts performance to worse-than-Massachusetts performance. Massachusetts bombed less than the other places.”

On the other hand, this company-creation data can be read to suggest no linkage between the theoretical opportunity provided by portable and affordable health insurance and entrepreneurial activity. Connecticut performed roughly as Massachusetts did over the same periods - but without a 2006 health care law. And when the numbers for new companies are expressed as a percentage of the total population, the per capita rate of new entrepreneurs in Massachusetts has lagged behind the whole of the United States since 2004.

“Whatever impact the Massachusetts health care act may have had on business start-ups has been washed away in the flood of the financial crisis and resulting recession,” said Mr. Nakosteen in a follow-up email. “In recent years I think we are mostly seeing cyclical effects rather than anything that can be tied to a state policy.”

This is why it is impossible - or perhaps irresponsible - to attempt to tease out any connections, or the absence of a c onnection, between any of these facts and the health care law, according to Mr. Nakosteen and every other economist we spoke with. There are just too many other variables at play, not least of which is the greatest economic calamity since the Depression. “This kind of impact research is really difficult to conduct, because you should have a clear intervention like the health care law, and you have to assume that no other factors are intervening,” Mr. Motoyama said. “And in reality, that kind of hypothetical situation does not exist.”

Mr. Gruber pointed out that many more small firms in Massachusetts now offer health insurance than did before the reform. “Beyond that,” he said, “it's just theory.”

But two authorities on entrepreneurship at Babson College, outside Boston, were skeptical of a link between the health law and start-ups. Donna Kelley said that studies of American entrepreneurs have found that “health insurance is one factor when it co mes to entrepreneurship, but there are many factors, and this is a smaller factor.”

“The health care affordability act is a small step in the right direction but not a complete solution,” said Dennis Ceru, a professor who teaches entrepreneurship but also works with business owners as a consultant and as the head of a networking organization called The CEO's Group. “It seems like it has helped a little bit but not a great deal. There are still all of the taxes, and small- to medium-sized businesses still have difficulty obtaining bank loans or other funding.”

Under Attack, Nate Silver Picks the Wrong Defense

“Anybody that thinks that this race is anything but a tossup right now is such an ideologue, they should be kept away from typewriters, computers, laptops and microphones for the next 10 days, because they're jokes.”

The above words are those of Joe Scarborough, host of MSNBC's “Morning Joe” program. He's talking about Nate Silver, the statistics wizard whose FiveThirtyEight blog is licensed by The New York Times, and who writes for The Times frequently online as well as in print. Mr. Silver also has a desk in The Times's newsroom.

As the presidential campaign veers around the clubhouse turn and zooms into the home stretch, Mr. Silver is very much in the public eye.

For months now, he has been predicting that President Obama has about a 75 percent probability, give or take a few points, of winning re-election on Tuesday. He uses an algorithm â€" some call it a secret sauce - that combines the numbers in public opinion polls and produces a result t hat he then turns into a prediction.

That has endeared him to liberals and Democrats, just as it has infuriated conservatives and Republicans. Mr. Silver himself has said that he supported Mr. Obama in 2008 but his work tends to focus on numbers, not policy and politics.

He has been out there promoting his book, “The Signal and the Noise,” which has increased his visibility further. In short, he's everywhere and his name is on everyone's lips.

As Brendan Nyhan noted in Columbia Journalism Review, some pundits resent him because his methods represent a mortal threat to traditional “horse race” political commentary.

His skirmish with Mr. Scarborough is especially high profile. Mr. Scarborough, as noted above, disagrees with Mr. Silver's prediction, calling the race a dead heat and saying that Mr. Silver is a fool to say otherwise.

Mr. Silver is quite accurate in his argument against Mr. Scarborough. He clearly says that the closeness of the popular vote does not affect the probability that Mr. Obama will win. They are, simply, two very different things.

So on Thursday, frustrated and irritated, Mr. Silver challenged Mr. Scarborough to a wager in a Twitter message - $1,000 to the Red Cross. (The offer later climbed to $2,000.)

If Mr. Obama wins, Mr. Scarborough pays up; if Mitt Romney wins, Mr. Silver does the same.

 So far, Mr. Scarborough isn't biting on the offer and I could not reach him for comment Thursday.

In a phone conversation, Mr. Silver described the wager offer as “half playful and half serious.”

“He's been on a rant, calling me an idiot and a partisan, so I'm asking him to put some integrity behind it,” he said. “I don't stand to gain anything from it; it's for charity.”

He added that he is feeling the strain of being under attack and vulnerable to criticism as Election Day approaches.

“It's a high-stress time,” he said.

I can understand and sympathize with that.

But whatever the motivation behind it, the wager offer is a bad idea â€" giving ammunition to the critics who want to paint Mr. Silver as a partisan who is trying to sway the outcome.

It's also inappropriate for a Times journalist, which is how Mr. Silver is seen by the public even though he's not a regular staff member.

“I wouldn't want to see it become newsroom practice,” said the associate managing editor for standards, Philip B. Corbett. He described Mr. Silver's status as a blogger - something like a columnist - as a mitigating factor.

Granted, Mr. Silver isn't covering the presidential race as a political reporter would.

But he is closely associated with The Times and its journalism â€" in fact, he's probably (and please know that I use the p-word loosely) its most high-profile writer at this particular moment.

When he came to work at The Times, Mr. Silver gained a lot mo re visibility and the credibility associated with a prominent institution. But he lost something, too: the right to act like a free agent with responsibilities to nobody's standards but his own.

Wrestling With Expansion Plans

At the most recent meeting of the She Owns It business group, the owners gave updates on some longstanding issues, and raised a few new ones. Thinking Caps Tutoring, owned by Alexandra Mayzler, may be closing - and opening - a location. At the same time, Ms. Mayzler is moving ahead with the company's new tagline and a Web site redesign. Beth Shaw, who owns YogaFit, also has plans to revamp her Web site. But they've recently been delayed.

Ms. Mayzler opened a Houston location in January. Now she is considering closing it because the branch has failed to pay for itself, let alone make a profit. She's not sure why. Perhaps, she speculated, it's because of personnel changes in that office or maybe it's because Houston's population is so spread out. “But those are just excuses,” she added. For now, she plans to see how things go through December and determine whether Thinking Caps should adjust its Houston prices.

Thinking Caps' location in Austin, Tex., is doin g fine, Ms. Mayzler said. New York, where the business started, remains its largest market. And despite the disappointing results in Houston, Ms. Mayzler is still interested in expanding. But this time, she plans to stay closer to home.

She has set her sights on central New Jersey, a location Thinking Caps can manage from New York with existing staff. Despite high demand for tutors in “the obvious places like Long Island, Westchester, and northern New Jersey,” Ms. Mayzler said it's been hard to find tutors to service those areas. “No 20-year-olds live in Westchester,” she said. “So you wind up sending tutors out there, which is a logistical pain and very difficult and exhausting for the tutors.”

Central New Jersey appeals to her because it is close enough to keep an eye on from New York, yet far enough from the city to pull in different clients. And with Princeton and Rutgers in the area, there are plenty of graduate stud ents to draw on as potential tutors. She said she has already interviewed a few promising prospects. Additionally, Thinking Caps is contacting schools and education professionals in the area. “We're just feeling it out - we're not going to do anything crazy,” she said. But if everything falls into place, she hopes to move forward.

In addition to making these decisions, Ms. Mayzler is overseeing the redesign of her Web site, which she said is proceeding on schedule. “I was thrilled to see all the comments Deirdre got,” she said, referring to reactions to my previous post in which the group member Deirdre Lord, who owns the Megawatt Hour, solicited feedback on her company's site. Ms. Mayzler said many of the comments addressed issues that wouldn't have crossed her mind.

“Did you ever pick a tagline?” asked Ms. Lord, following up on a discussion from previous posts.

Yes, she said. “We're going with, ‘Where bright students become brilliant learn ers.'”

Ms. Lord said she loved it but didn't recall hearing it among the options Ms. Mayzler mentioned during earlier meetings.

Actually, said Ms. Mayzler, it was one of her first ideas. When she came up with it, she ran it by two people. One liked it and the other said it was too long, so she scrapped it. But recently, she revisited all her old ideas. She realizes it's long but, “I'm not coming up with the next, ‘Just do it,'” she said, referring to the Nike slogan. Thinking Caps' logo will be redesigned to complement the longer tagline.

Further refining Thinking Caps' tutor-training program, which Ms. Mayzler revamped last fall, is also on her 2012 to-do list. “By December 15, a lot of stuff needs to get finished at Thinking Caps,” she said.

The conversation turned to Ms. Lord, who said Green Capital Empire, which introduces investors and start-ups, just named her company one of the 50 most promising privately held green tech companies i n New York. She said she is trying to figure out what, if anything, this will mean for the Megawatt Hour. At the very least, it puts the company on the radar screens of potential angel investors and V.C.'s, she said. “We'll see about what it really turns into, but it's better than not being on the list,” she added.

Ms. Shaw said she is back to “square one” with YogaFit's Web site redesign plans. “I thought I had found a company to redo our Web site and they ended up bailing,” she said.

“Why?” Ms. Mayzler asked.

“They wanted us to switch to their back-end system to go forward and then said their quote was going to be higher than they anticipated, so I'm thinking they didn't realize the scope of the work when they first looked at the project,” she said. YogaFit now uses Orderwave to manage its inventory, which includes apparel, books, DVDs and CDs. Ms. Shaw said that Orderwave, unlike the back-end system the Web design firm proposed, is co mpatible with QuickBooks, which her company uses. Additionally, she said YogaFit has invested at least $100,000 into the Orderwave system and has no plans to switch to another one.

In future posts, we will take a closer look at all of the companies' Web sites. In the meantime, do you think Ms. Mayzler's expansion plans make sense? If your business has expanded geographically, how did you decide on the right location?

You can follow Adriana Gardella on Twitter.

Some Businesses Choose Not to Grow

One of the biggest decisions business owners face is whether to try to expand their businesses. This may seem like a silly question: Who wouldn't want a business to grow? But owners who choose growth can get stuck. For some, the issue is how to handle delegation. For others, it's about raising enough capital. And for still others, it's about learning the technical skills required to manage a growing business.

Years ago, my two-person company was transformed by an acquisition that forced me to make several changes. I immediately had to learn skills that many learn over a period of years. The acquisition caused our sales to grow to $1.5 million from $75,000 and employment to grow to more than 20 full-time workers from one part-time employee. There were more changes four years later, when we bought a company that was located out of town. Now, I not only had to manage more than 30 employees, I had to figure out how to manage a company in a different city.

During the last 30 years, I've come to understand that there are three types of business. Each one places burdens on its owners that are different and distinct. But the point is that a business owner has a choice: You don't have to get swept up in growth. Here are the options:

Microbusinesses are where all start-ups begin. The vast majority of the 27 million businesses in the United States are microbusinesses. Some are start-ups, some have been in business for years and some would like to be bigger, but the owners can't figure out how to make the leap.

Microbusinesses are often one-person shows. If the owner becomes disabled or dies, the business falls apart. The biggest challenge with a microbusiness is keeping a steady stream of income. In my case, when I had a microbusiness, I would fill vending machines, make sandwiches for our machines, order stock for our warehouse, fix vending machines when they were broken, do our bookkeeping and co unt the money - in other words, I was the chief cook and bottle washer.

For me, being in a microbusiness was similar to buying myself a job. And in my case, the job was mostly about filling vending machines and making sure they worked. There was no time to think strategically or act strategically. I even found it difficult to find time to make sales calls. For many microbusinesses, there just isn't time or money to make the jump. My break came when one of our competitors went out of business and we were able to buy its assets. This catapulted me to the next level.

I think of the next largest group of businesses as traditional small businesses. These businesses usually have five to 25 employees. They are more complex in that the owners don't do all of the direct work themselves. They have moved into a role supporting or supervising others. As with microbusinesses, many owners decide this is a good place to be and don't want to make their business any larger.

Those owners who do want their companies to move to the next stage have to develop the ability to create capital for growth. They also have to learn tools and techniques for running a larger company. Sometimes these owners get stuck because their businesses don't make enough money or because they haven't learned the right skills.

When my business was in this stage, I didn't delegate well. I often felt like a firefighter. I had people who could help but no one who could manage. If there was a problem, it always came to my attention. Actually, I wanted it that way. I was convinced that no one could do anything in the business as well as I could. I wasn't ready or willing to let go and have others help run my company.

This was my personal roadblock. I didn't know how to manage; I just knew how to provide good service through brute force.

Those who do move on can become a lower middle market business, which is a business that can be sold. That means the busine ss has to be able to run for long stretches without the efforts of the owner. Businesses that create enterprise value typically have more than 25 employees and produce more than $5 million in sales per year. The United States Census Bureau says there are about 300,000 businesses in this category.

Owners of successful companies that produce enterprise value know how to act and think strategically. They have created companies that function with tactical excellence; they are not just trying to get through the day. The truly successful businesses in this class have also achieved strategic excellence. It's when tactical excellence is joined by strategic excellence that real value is created for the owner.

Moving into the lower middle market was a very difficult transition for me. I had to learn to trust my employees, allow others to make mistakes, put together dashboards to monitor what was happening in the company and find a way to take myself out of day-to-day opera tions. Oh, and I almost forgot - I also had to find a way to finance the growth and additional resources that we needed.

Over the next few weeks I'll delve more deeply into the positives and challenges that come with each of these types of business. Please feel free to share your experiences owning a business in one of these stages - or moving from one to another.

Josh Patrick is a founder and principal at Stage 2 Planning Partners, where he works with private business owners on wealth management issues.