Lorraine Miller invested $2,000 and twenty years of her life in what she has today. In 1994, the Small Business Administration named her "Small Business Person of the Year," and in 1997 Ernst & Young named her one of Salt Lake's outstanding entrepreneurs. She provides indoor/outdoor landscaping to hundreds of customers and you'll find her retail store full of plants for shoppers with any budget. Viewers learn how she has built a business by giving her staff what she never got from an employer: freedom.

Key Idea #1: The Lightbulb

Boss is a four-letter word to Lorraine. She started her business because she had a boss who told her to stop asking questions and get back to doing what she was told to do. This experience is etched into her psyche, and she vowed she would never treat another human being the way she had been treated by that bad boss. Lorraine's goal at Cactus & Tropicals is to deliver to customers more than they paid for, and to do that by finding people who'd want to work in a place where they are given guidelines - not rules. The staff at Cactus & Tropicals is expected to ask questions, create, improvise and serve customers with little or no supervision. Lorraine has cut her regular schedule to only a few days a week and is teaching everyone how to read a balance sheet, how to do sales forecasting, how to measure individual and team productivity, and how to earn performance-based bonuses. This is not rocket science, but it definitely looks and sounds easier than it is.

To apply Lorraine's genius to your business, you have to get out of the way and let others take the lead. You have to let them make mistakes. You have to be the teacher, leader or mentor, not the boss. Boss is a four-letter word that is not allowed at Cactus & Tropicals.

What do you think? How does a person's life experience affect the way they manage people?

Possible answers: Life experience is powerful. Lorraine was treated poorly by one boss, and that taught her how not to be when she started hiring employees.

What do you think? Does your personality affect how you will manage others?

Possible answers: Yes. If you are outgoing and energetic, you will spend much of your time with people, as a manager. It will be easy for you to get to know them and cultivate a personal relationship. If you are more reserved or if you prefer working alone and enjoy focusing on the processes of business, your employees won't spend large amounts of time with you personally. Lorraine is a quiet but warm person who wears well on people. She is concerned about the personal lives of her employees and this shows in her management style.

For a contrasting leadership style, study Marc Katz. Her you'll see Marc Katz is the effervescent-bigger-than life personality. With Cross Timbers, you just saw Bob Simpson who is quiet and brainy, and very much to himself. All personalities can succeed in leadership roles, but each person will do it in his or her own way.

What do you think? Why is boss a "four letter word?"

Possible answers: People don't want to be bossed. It is an old fashioned word that carries with it negative connotations for many people. People want a supervisor, a coach, a mentor or a leader, but they don't want a boss. When you manage the work of others, you will experience the most difficult challenges. Some compare managing people to rearing children. Everyday is a surprise, and one does well to have studied psychology.

Study Gary Walls to learn about managing people from a former coach, Anne Beiler to learn about building a team, Albert Black to learn how to teach a young workforce, Marty Edelston to learn how to get employees to think for themselves and Tom Valez to learn how to get the best from people.

Big Idea #2: Products and services must change with the times.
Today, one third of Lorraine's business comes from a new service.

You think back... Describe the business Lorriane started and how it has changed through the years?

Answer: She started by selling houseplants from a small retail shop. When she was bought out of lease, she had the money to buy the location she has today. Over the years she has added land and made improvements. Now she has a gift shop which does best with picture frames and candles. She also has her own greenhouse. The biggest positive addition has been the indoor landscaping services she offers as we saw at the Shriners Hospital.

What do you think? Why is having a greenhouse so profitable for Lorraine?

Possible answer: A plant sitting on a shelf in a shop will deteriorate and loose value with time. Plants in a greenhouse improve over time. They get larger and stronger in the perfect atmosphere and under the care of experts such as the employees at Cactus & Tropicals. The plants in a plant shop are the inventory. A retailer must turn the inventory to make profits. Inventory that doesn't sell is usually marked down, which means that the retailer's profits margin shrinks. After sitting in a greenhouse, a plant can be marked up rather than marked down.

Big Idea #3: Tap into trends.
Outsourcing is a trend that Lorraine is profiting from.

You think back... What is outsourcing and why is it good for Lorraine?

Answer: When a large company looks for ways to increase profits, it will often downsize its workforce with the big goal being to get work done efficiently. Lorraine's company can do a better job for less cost to the hospital than could full time hospital employees. There are many business owners here at SmallBusinessSchool who make big bucks supplying big customers with products or services they could do internally but they choose to outsource. For example, Jane Theberge only sews the uppers of shoes for customers like Cole Hahn, Vicki Bondoc creates software for the Air Force, Monica Morgan does photography for Anheuser-Busch.

Big Idea #4: Open book management is motivational for employees.
Lorraine has monthly finance meetings where employees learn about how the business is doing.

You think back... In the meeting you saw on the tape, did Lorraine set goals or did the employees offer their ideas?

Answer: Lorraine asked the employees to set the goals. They were all looking at the year-end numbers, which included all the costs of doing business. It is very common for employees to know what the sales are, but most employees don't know what it costs to run a business.

What do you think? Why would some business owners hesitate to share all the numbers of the business with employees?

Possible answer: The owner may think the employees will be jealous or think the owner is making too much money. In reality, when employees see how much it really costs to run a business, they are surprised and have greater respect for the owner. Lorraine's employees think she should take more salary and benefits from the business.

For example, if an employee is earning $30,000 a year in salary, just the required employment taxes paid to the Federal Government for that employee will be an additional $10,000 or more. That employee only sees what is in the paycheck and forgets the employer must pay the additional $10,000.

Employees are shocked to see the cost of a lease, insurance, utilities, advertising, telephones, etc.

Another reason business owners don't share information is they think they don't have time. Lorraine and others will say the benefit derived from sharing information far outweighs the liability of taking time to do so.

To learn how to run her company with open-book management techniques, Lorraine took a course taught by Jack Stack, author of "The Great Game of Business."

Read what Jim Schell, our veteran entrepreneur, says about open book management by going to the study guide about Medallion Funding. Also, the following books can be useful:
"Open-Book Management: The Coming Business Revolution" by John Case
"The Open-Book Experience: Lessons From Over 100 Companies Who Successfully Transformed Themselves" by John Case
"The Power of Open-Book Management" by John P. Schuster