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Business lessons via road trip

'Roadside MBA' deals with problems that keep managers of small businesses awake at night

 

Three business school professors go into a shoe store in Maine on a whim. They come out with an idea.

Inside, the trio of economists were so bugged by a salesman's persistence that they were driven to ask what the heck was happening.

Soon all the employees, even the manager, huddled around to explain that sales staff members are marked down for not hovering around customers.

Everyone gets engrossed in a discussion about sales, suppliers and all the rest of the strategies that the three professors teach to MBA students in class. This led to an epiphany; it was time for the eggheads to get out of the ivory tower and on the road.

The result was a series of drives across the nation to visit small businesses in often out-of-the-way towns, and they report their findings in a new book, "Roadside MBA: Back Road Lessons for Entrepreneurs, Executives and Small Business Owners." It is published by Business Plus.

Along the way we learn real-world lessons. From Phil Oakenshield, a Vietnam veteran who runs Montana's Eko Compost, which processes human waste and biodiesel, we learn how to negotiate. From Mike Bodart in Indiana, who bought the sports shop he adored as a kid, we learn how to fend off big rivals.

It is not Kerouac. The style is self-consciously jokey, confiding and frankly a bit cheesy as the three buddies mingle self-deprecating comments on their tastes in motels, music and failed marriages. One confuses kale with quail.

But the authors are smart guys, and the book turns out to be an excellent primer on dealing with problems that keep managers of small businesses awake at night. These problems included keeping out rivals, figuring out what customers will pay — "not something they are likely to share enthusiastically" — and dealing with employees.

At times, the discussions get a bit technical. Yet there is a blessed absence of math, graphs and even acronyms from the trio. They teach MBA courses at Northwestern's Kellogg School of Management, Stanford Graduate School of Business and Utah's David Eccles School of Business.

The "scaling the business" section compares the strategies of three ventures: Arkansas' Braces by Burris, which provides orthodontic services to remote locations with the help of vans and light aircraft; Oregon's Silk Espresso, where Leah McMahon's coffee wins prizes; and Mississippi's fast-growth Mugshots Grill and Bar, a chain of restaurants aimed at college kids.

The analysis makes clear why McMahon's coffee shop must stay in one location — because her personal touch is less replicable — and expand into classy pastries and sandwiches, while the other two can expand into many sites.

Two of the best chapters address the people factor. The interviewees share a variety of methods for discouraging the wrong applicants and hiring the right ones.

"Our best workers are single moms with two kids and a deadbeat ex-husband," says the president of Saint Joe Distributing in Missouri. Saint Joe could run a night shift but chooses not to because that would upset the mothers while attracting "deadbeat ex-husbands."

A bad dinner and a debate on whether to stiff the waitress on the tip forms a neat introduction to the issue of pay incentives.

Perhaps the authors chose the more nuanced examples because they were more interesting. But it is intriguing to hear how the Stuart Tinley law firm in Iowa looks at softer contributions as well as billable hours — or how the Plastic Moldings Co. in Ohio prefers, on balance, to reward teams over individuals.

Is such a book really needed when there is so much advice around? I read it on a sort of road trip — actually, a bus ride — during which another passenger was describing cash-flow problems as co-owner of a new pizzeria.

"We make great money at weekends, but during the week it's dead, and we don't know what to do," he said, surprised. If only he had read some of these accounts.

Harriet Arnold is an editor at the Financial Times of London, in which this review first appeared.

Copyright © 2015, Los Angeles Times
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