You think back: There are other, even more powerful bonding experiences. What about the respect within the family? What about their attitude about quality? How about their own loyalties to their customers?

A Possible Answer from a Viewer: From LifeSpann Ministries - A product absolutely can create a special bond between the product and the family that produces it. The family must draw and remain closer to preserve their good name and reputation in order to keep producing such a great and one-of-a-kind product for this present time and throughout the generations to come. When families are drawn close, they create such a unique bond. When times are hard, trying and demanding, and all of the clients and customers are not around, family will always be there to support and draw strength from one another. United a family will stand, but divided they will fall.

A special family bond can no only generate more clients and customers, but also produce innovative or fresher ideas. There are many businesses, market places, and homes that depend on your product and have made it a part of their lives, and that alone should create an ultimate bond between the family, their product and all clients and customers throughout the generations.

You think back: What are your most powerful bonding experiences and why?

Key Idea #2: The Family Business. We often hear about how the second generation "ran the business into the ground," but just as often it is the kids who catapult Mom and Pop's shop into a major player within an industry segment.

Topic for discussion: You can easily visualize the boys growing up delivering coffee to customers everyday before school and throughout the weekends. You can well imagine that they were highly motivated to go to college and "not to do what dad is doing to make a living." Too much work. But, family businesses can have a special magic, a deep-seated allure, especially when brothers are just getting out of college and Mom and Dad are considering retiring.

You think about it: What happens when you grow up in a small business? Why should children look at the opportunities to take over? What are some of the risks?

Possible Answer: We begin to take the business for granted. It has always been there. Even worse, we hold it up with some disdain because it takes so much of Mom and Dad's time. There are however intangibles within a family business that are difficult to value, but those intangibles can inspire and seduce the children to rethink their options. Usually there is no business plan involved and their is no exit strategy for the parents. The risks become manifold as various parts of the family begin evaluating the business and those who are interested in carrying the business forward must clearly justify their position, the business valuation, and their relation / responsibilities to other siblings and family members.

Key Idea #3 . Acquiring the competition is a powerful way to build a business.

The Souto family has acquired their competitors twice. This strategy has made them the largest Cuban coffee roasters in the US.

You think back: Why were they able to make the take-overs work?

Answer: They have in place technology, million dollar roasters and leadership to roast, package, deliver and serve the customers they won with the buy-outs. Just getting more customers will not guarantee that you will see long-term growth. If you are not able to do the work and make customers happy, they will find another source.

(Online learning question: Write a long-range plan to get to know, understand and perhaps purchase your competitor.)

Key Idea #4. Employee loyalty springs from the Souto family's respect for the dignity of all people. On a tour through the plant Alberto introduces us to many people. You meet Fernando, the taster and coffee buyer, and Jean-Paul who runs the roasters. These gentlemen have been at Cafe Pilon for years.

You think about it: Why do people work at a particular place?

Answer: Given a strong job market, people work where they are treated with respect. When you create that type of work place, the word gets out that your company is a good place to work.

You think about it: Why is loyalty important?

Answer: Trade secrets are protected by loyal people and you are guaranteed continuity and institutional memory. And, when good employees come and stay, you don't have the cost of turnover, which hurts financially, in terms of public relations, the cost of hiring and the cost of training. If your sales people are constantly leaving, the customers begin to raise questions about the corporate culture. Also, institutional memory is powerful. An employee who has been with you for years knows about so many interactions they are able to predict how to handle the future, they can save time and heartache by doing the right thing intuitively.

You think back: What are the ways Alberto demonstrates respect?

Answer: Jean-Paul said, "They treat us like family." This is meaningful compliment. It suggests that employees can go to the Soutos with more than work-related problems. This means if Jean-Paul's child is in the school play, of course Jean-Paul should take off work and go see the play. We hear this over and over inside small companies. Employees feel they are all one family and this is important to retention. Also, Alberto defines the work then allows the person to do the job without intruding. This is giving the non-verbal stamp of approval and the implication is, "I know you can do this job."

Online learning question: What more can you do to show respect for employees?

Key Idea #5: Customization for customers is the way to fend off competition.

Cafe Pilon has two types of customers. They sell to retail outlets such as grocery stores and convenience stores where customers purchase coffee in the sack and take it home to brew it themselves. They call the other type of customer, institutional. Restaurants, cafes, coffee shops, hotels and even hospitals, brew up the coffee and serve it prepared. While the retail customers all have the same products on their shelves, institutional customers may ask for special treatment. You think back: How does Cafe Pilon customize for its customers?

Answer: Angel said that they will create a special blend for institutional customers. For example, Versailles, the restaurant and cafe, we visited has its own blend.

You think about it: How does this protect Cafe Pilon against competition?

Possible answer: The competition doesn't know how Cafe Pilon makes its special blend for Versailles and it would be a bit difficult for them to find out. If Cafe Pilon was selling to Versailles what they sell in grocery stores, competitors can buy that product and analyze it. Unless an employee provides a sample of the coffee grounds before it is brewed, competitors could only drink the finished product and try to guess about how it was blended. We have looked at many companies on Small Business School who have secret formula, or trade secrets, and the famous brand that does this is Coca Cola. Providing a custom product for customers makes it difficult for competitors to copy but it also forms a stronger bond between you and your customer. You spend time creating the product by testing it with their customers or in this case, the owner of Versailles may have been very active in the development of the blend. When a competitor calls on Versailles' owner and says I have some Cuban coffee for you to try, that owner will probably say he is not interested because he has his own special blend.

Online learning question: Can you find ways to customize even more fully for customers?)

Key Idea #6: Separate your ego from your business decisions.Don't "reinvent the wheel. "If it ain't broke, don't fix it."

Topic for discussion: The Souto family was in the espresso roasting business in Cuba, but the biggest name in coffee in Cuba was Cafe Pilon. When the founder of Cafe Pilon was ready to retire, the Soutos offered to buy the business and created growth by combining the companies to maximize efficiencies. And they never thought of dropping the Cafe Pilon name to replace it with Souto. Bottomline, business decisions should be made separate from our egos. The Soutos would rather increase profits than see their own name on the package. Decades later, they have acquired another competitor that carries another name. This is the Souto family business that is proud to own all the best names in Cuban coffee.

You think about it: Why doesn't every business owner do this?

Answers: The answer is as varied as there are business owners. In general, most of us who start a business see it as our child. Our child carrys our name and we are proud of that. As Enrique said, the biggest name in Cuban coffee that was known all over the island, was Cafe Pilon. So rather than being fixated on their own name, or the name of their company (Rowland Roasters), they embraced the big brand and are happy hearing the sound of the cash register ring.

You think back: How did the Soutos purchase Cafe Pilon?

Answer: The business was owned by Manuel Jesus Bascuas who had also fled Cuba. In the USA, Jose Enrique's father paid Mr. Bascuas to roast coffee before the Soutos could buy their own equipment. The families were friends. Mr. Bascuas had no family members intersted in taking over the company so he offered to sell it to the Souto family.

You think about it: If the two families had been fierce, unfriendly competitors, do you think the Soutos could have purchased Cafe Pilon?
Answer: Probably not. While Mr. Bascuas could have sold to the Soutos because he knew they have a strong company, emotion could have prevented him from making a strictly business decision. People are complicated and money is not everything especially to people who are already wealthy. Mr. Bascuas and Mr. Souto were on friendly terms which is why the deal was done.

You think about it: What can be learned from this?

Answer: All people, even your competitor, should be treated with utmost respect. The purchase of Cafe Pilon, even though it was not a big company, enabled the Souto family to take a giant step ahead in the Cuban coffee market.

Key Idea #7:The role of the next generation may best be served by "pushing the envelope" to create new opportunities. Anna and JP are cousins who are both defining new roles in the company. In one way they feel they are closing the loop with their grandfather; using technology, they plan to deliver coffee door-to-door, but not just in the neighborhoods of Miami, but in every neighborhood virtually anywhere on earth.

You think about it: What do you think is the role of the next generation?

Possible Answer: Perhaps pushing the envelope most often applied to implementing new efficiencies, especially the new technologies and market research (testing) of many-possible futures, but perhaps the best role of the third generation is to examine the working business plan and to experience firsthand all the jobs of all the employees, and to begin working on the exit strategies for all involved, equity plans, harvesting strategies, and liquidity models for the business.

Key Idea #8:Your reputation is your greatest asset. It is not surprising that Enrique said the most important lesson he learned from his father is that, "Your word is your bond."

You think about it: Why is this so important for every person in business but even more critical to small business owners?

Answer: As a business owner, you cannot hide. People know who you are. You make sales calls, you purchase equipment and determine how it will be used, you make the decisions that impact all aspects of the business. Even if you are not at the company every day or even if you have turned over the operation to professional leadership, you have to take responsibility for every thing that goes on in your company. In a big company, managers can place blame all over the place. Finger pointing is a favorite strategy because the decision process is complicated and often takes weeks or months. In a small company, an owner can lie about when she shipped a product. The customer can trace it with the shipping company and discover that the owner lied. Easy.

There's a straight line from the customer to the owner. In a big company, the person responsible for shipping can lie about a shipping date and when the customer calls the person can say, "I thought it was shipped on the date I told you. The people in shipping must have lost the product." In a small business, there probably isn't a shipping department. It is the owner walking back to a place where an employee may be waiting to pack and ship things, but, the owner is fully aware of every step. As soon as an owner lies, her business is weakened. People do not want to do business with people they cannot trust. To grow a business and have it be profitable over decades your word must be your bond.

Topic for discussion: To work, capitalism must be based on morals and respect for the rule of law. There are general rules governing business then there are specific agreements you enter into with suppliers, employees and customers.

You think about it: Can business work if everyone involved in a relationship is only working with a written contract.

Answer: Probably not very well. Contracts and written agreements spelling out what each party is going to do are very useful and you need to take time to create written agreements and often you will need an attorney to assist you. However, as a relationship unfolds, many things are said and done that can not be captured in writing. All parties have to understand and embrace the spirit of the agreement and all must want the "deal" to work out in a win-win way. This is why you only want to enter into an agreement with people who have already demonstrated that they are trustworthy. You cannot make a person who lies and misrepresents information abide by some demand in a document. They will find a way to get out of it if it suits them.

Online learning question: Do you now do business with or employee anyone you don't trust? If so, what can you do to disengage with these people?

Key Idea #9. The heart of democracy and human productivity is individual ownership of ideas, businesses, homes and land.

The Souto family lost everything when Castro took over Cuba. They came to the USA and started from scratch and were motivated to work very hard to create value for new customers and by doing that they are rewarded by our free-enterprise system.

You think about it: Do people who own their own home take more care to keep it attractive than people who rent? Why?

Answer: Yes. We are naturally self-centered and I don't mean to say selfish. Our nature causes us to try to protect ourselves. When we own a home we try to protect it and in doing that, the whole neighborhood improves. This is true about business ownership. When we deliver a service or product and are paid, we then have the money to feed, clothe and house ourselves. When we succeed, we create work for others and the whole economy improves. Maturity brings us all to the point when we stop thinking so much about ourselves and start thinking about helping others be productive and find their way to contribute.

Online learning question: What are you doing to help employees make their dreams come true?

Key Idea #10. "Connected?" Invest in technology that enhances your core business practices, then expand from there.

Too much money is often invested in technologies that do not involve the core competencies of the business. Networking systems, protecting financials, and enhancing communications (email) are the first steps toward e-commerce. In the 21st century, all core business practices will be moved to secure Internet servers within firewalls.

You think about it: Before 2000 and the new Millennium, for most "http://www." looked like gobblygook. Today, everybody recognizes it as the beginning of a URL, an Internet address or Universal Resource Locator. Unwittingly we learn. With some intentionality, we can learn more and faster. Who knows about firewalls? Email servers? Somebody has to know these basics for your business.

Answer: We all need to protect our businesses at the same time we serve customers in the manner they want to be servered. Increasingly our customers will demand online ordering, tracking, and payment and those who are there will retain and expand their customer base. Those who are not will lose market share and then customers.

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