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VOL. 128 | NO. 132 | Tuesday, July 09, 2013

Value Proposition

Memphis small businesses find values driving success

By Andy Meek

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The secret ingredient at Kat Gordon’s East Memphis bakery is not a pinch of this or an extra stir of that.

Muddy’s Bake Shop owner Kat Gordon, left, chats with employees Agoud Lund, Eula Ashbee and Anthony Dean at her East Memphis bake shop.

(Daily News/Andrew Breig)

Rather, the steady flow of treats from her bakery’s bins to customers’ hands depends in large part on the set of values she drew up that guides even the smallest details at Muddy’s Bake Shop.

Those values have influenced, for example, the virtuous circle she’s tried to set in motion by things like forgoing advertising and paying her employees more. Doing that, in theory, leads to a happier staff that works harder and keeps customers satisfied, which keeps business coming through the door, making it possible to keep paying workers well – and round and round it goes.

“I consider Muddy’s a values-driven business,” Gordon said. “From the get-go, there were certain values embedded in the culture and certain principles I personally felt were important and tried to incorporate. A couple years ago … I put it in writing. I collaborated with staff, talked over these guiding principles, edited, talked some more, and then as a group we agreed to make it part of canon that we would all buy into and support.”

This is one of the recurring themes in stories across Memphis’ small-business community: values, for those entrepreneurs who think strategically about their success, can be even more fundamental than the business plan itself.

In Muddy’s case, Gordon believes the right set of values driving a business can indeed produce a tangible financial return, even if that return is not immediately visible. Because of that, she’s a member of the Small Giants community, a small business-focused global membership group focused on spreading the word about the fundamental business sense of running a small- and medium-sized business with a focus on values as opposed to attention exclusively focused on the bottom line.

With the help of the Center for Values-Driven Leadership at Chicago’s Benedictine University, the Small Giants community last year launched a three-year research project meant to examine the relationship between a business’ values, culture and its profit.

Anthony Dean helps a customer at Muddy’s Bake Shop, where employees are guided by values that were embedded in the company’s culture from the start.

(Daily News/Andrew Breig)

Plenty of Memphis small-business owners aren’t exactly waiting around for the study’s outcome before following approaches like Gordon’s.

They include Jonathan Frase, CEO at Frase Protection. His approach to amassing a high-quality crew of employees, which his company in turn pays well and tries to create a desirable environment for, is to not hire often.

When the company does need to hire, it does so slowly and more purposefully than other firms.

“We have a team of about 20 people who take care of 4,000 active customers in the greater Memphis area,” Frase said. “I do a lot of reading about companies in my space and in other markets, and those companies would have somewhere around 40 team members servicing the same number of clients.

“I think we can do more and provide better services because we hire slower, hire by word of mouth and look for the best people.”

Like Gordon, Frase said his company pays employees above average wages. From an economic standpoint, he added, it works out. Frase pays its workers well because it hires the best it can find. And because it hires strong employees, they tend to be more productive – meaning the company doesn’t need to hire as many as a competitor with a larger number of less zealous workers.

“I think we can do more and provide better services because we hire slower, hire by word of mouth and look for the best people.”

–Jonathan Frase
CEO, Frase Protection

“How do you find great people? You don’t rush into it,” Frase said. “You’ve got to take your time. When it comes to finding someone, the last thing you want to have to do is scramble and fill a spot in a hurry.”

In that same vein, Kathe Stewart, chief operations officer for Precision Air Conditioning and Heating LLC, said for her company it’s in large part about the environment the company creates for employees.

The company pays 100 percent of employees’ health care. The company regularly honors employees who performed the best installation of the month and had the best customer reviews.

Stewart said the company – which celebrates its 40th anniversary this year – also is choosy about who it hires. She interviews hundreds of prospects a year and might hire, from that, only a handful.

“This is a family business,” Stewart said. “We have a philosophy of ‘We’re all in this together.’ Everybody is a vital part of the process, including the person who answers the phone. We rise or fall as a unit.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 43 12,074
MORTGAGES 0 78 15,834
FORECLOSURE NOTICES 39 39 3,168
BUILDING PERMITS 292 292 29,124
BANKRUPTCIES 3 100 11,771
BUSINESS LICENSES 0 18 4,292
UTILITY CONNECTIONS 0 190 17,922
MARRIAGE LICENSES 0 43 3,711

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