Category Archive for "Business Skills Development Series"

Eight Things to Consider when Creating Change in your Business

Here are 8 keys to keep in mind when planning, communicating, implementing and creating change… 1. There is always more than one way. Change is often uncomfortable, and adapting to change is usually difficult and sometimes messy. Why, you ask? Simple. Changes are easy to list in a plan and display to your staff, but old habits die hard. So how do you overcome the resistance to your planned changes? Gather perspectives from colleagues, mentors and your employees and adapt the sensible approaches into your change plan. 2. Lay out what specifically needs to change, and why. Too many plans are heavy on the “lingo” and light on substance. What does all that mean in the day-to-day language of your business? You must make that connection for your staff. For example, what does it mean when you say “the company needs to be more pro-active?” What specific behaviors characterize a “reactive” organization? The high-level overviews are certainly needed, but to give your change plan a better chance to succeed you need to get right down to the root of what you’re trying to achieve – and describe that in your plan. 3. Know what results you want from both the change plan AND the tactics you’ll use to achieve it. What are the strategic objectives of each key part of your change plan? What’s the “call to action” for each step? What systemic or operational changes will provide the framework for the new behaviors and desired results? 4. Empower and utilize a communication strategist right from the start. Too often, qualified communicators are not involved in steering change until after the initial backlash is in full force. Just because someone can create a PowerPoint presentation doesn’t mean they are qualified to understand how the people in your company will respond to the change that’s being laid out, or what information they’ll need to really understand it and “buy in”. To launch your change plan effectively, ensure that you have an effective communicator on your strategy team from day one. 5. Put employees in the loop as early as possible. There’s a real dilemma in both public and private companies where external communication is a priority and employees first hear about forthcoming changes through the “rumor mill”. Incomplete information and lack of understanding cause fear and insecurity to heighten. As a result, you waste a lot of time getting back to

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Cash Flow Problems – Who Is Really Causing Yours?

When it comes to dealing with the issue of having enough cash to run your business, a knee-jerk reaction to tightening cash flow is to hit the brakes on the invoices piling up for you to pay. The phones start ringing with people chasing their money, your employees spend precious time managing conflict, and ill-will within your trusted relationships grows by the day. Sleep, productivity, profitability and personal satisfaction become long lost memories.How much of your time and energy is spent managing the downward spiral of this loss of focus on doing what you do best? Most small to medium size businesses go through this at one point, and in many cases cycle through it over and over again. While there is no quick answer to help dig out of a cash crunch, a couple of quick case studies should shed some light. Case 1 – Medium sized HVAC Business. Cash was running in short supply despite solid appointments across all departments. Pricing was competitive in the market. Standard of work was high with a good likelihood of repeat business. Operating costs were within expectations. Case 2 – Small Plumbing Contractor. Similarly, operating costs were within industry standard and they had a good flow of high margin jobs. Repeat business was a major strength and wages were competitive but within expectations. Neither business would appear have any issues with cash flow upon reviewing their P&L. There it was in black and white: Revenue; tick. Gross Profit; tick. Net Profit; tick. On paper that is. But the reality was that for both companies, cash to meet the costs of operating the business was tight. Really tight. The main issue that both businesses faced was getting stuck in the “delivery” cycle, where the focus is on doing all of the things to attract more business and service clients – but with little effort put towards collecting payment for those services. It’s a common trap, because this is where the business owner’s passion generally lies. It’s the cause that brought inspiration to start the business in the first place. Marketing the service; selling it to customers; delivering it with a high level of satisfaction. But what about the (boring) responsibility of getting paid for the work? In both cases above, no examination of their “payment” cycle had occurred for at least a year and a half. Neither owner looked at A/R aging reports.

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Is Your Value Proposition Valuable Enough?

The number one reason businesses fail is a weak value proposition.   Here are some strategic tips to pitch attention-grabbing ROI to your target buyers.   When you sit down to work on your business, the first question you should ask yourself is “what is my value proposition?” When we first ask that question, what we usually start to get is a list of products or services that the business provides. Other times, we get pitched the “features” of what the company offers. And sometimes, all we get is a blank stare. So let’s re-phrase the question: “What differentiates you from everyone else who does what you do?”   Now we’re talking. Sometimes we get standard buzz-words like “Customer Service, Quality, Value”, and those are not necessarily weak answers. They are however likely to be the exact same words their competitors use when asked that same question. In fact, almost all companies use those words to describe their business, but hardly any of them do a very much in their day-to-day operations to live up to those words. So if they’re not backing up the use of those descriptors, then what is the likelihood that any of their customers are using those words when they talk about their relationship with that company? If this sounds a lot like your business, then you probably don’t have a very strong value proposition, and it’s costing you money. So let’s talk about what a value proposition is, how to develop one and then use it for significant strategic advantage over your competitors. In all of the education, training, business and marketing development seminars etc. that we’ve been exposed to over the past 30 years, there is surprisingly little emphasis placed on the importance of a strong UVP. As a result, there is not a lot of information available to help you really understand what a UVP is, and how you can develop a strong UVP for your business. Our goal is to change that. Here are a few examples of unique value propositions: ∙  Domino’s Pizza – fast delivery ∙  7up – the UNcola ∙  Walmart – low prices ∙  McDonald’s – consistency More often though, strong value propositions come from having a tangible difference in your product or service or in a characteristic of how you create or deliver that product or service to market: ∙  Better processes – Supply chain: Walmart

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Six Sure-Fire Ways to Drive Customers Away

With all the marketing initiatives and sales promotions they focus on, many companies simply don’t ‘get’ that they have neglected to put customer service systems in place to avoid sabotaging their customer base. In fact, there are an astounding number of companies that by their actions seem motivated to degrade, separate, piss off and eventually lose their customers. As you read this, consider whether you are making these same mistakes. Here are six sure-fire ways you’ll drive them away if you’re not careful:   1. Try to sell them something they already buy from you (as if it were something new). Without fail, each week we get an offer from someone trying to sell us something that we already buy from them. This amounts to wasted marketing dollars, and even worse – it shows a real lack of appreciation for the business the customer is already giving you. 2. Inconsistency in your delivery. Have you ever gone to a restaurant that was great, only to be disappointed when you went back with family and friends? Inconsistency breeds a sheer lack of confidence in your ability to deliver. 3. Raising prices has a tendency to drive off some of your customers, resulting in the opposite effect you intended for your bottom line. (To be fair, this one also has a bit of an up-side, too. The up-side is that if your product or service is fantastic, raising prices will allow you to increase your profit and the only customers you’re likely to drive away are the “price shoppers” that make up the bulk of your headaches anyway.) 4. Responding slowly… a GREAT way to lose valued customers. I once responded to an advertisement for an online marketing company, and it took them a week to call me back. How could a company that focuses on marketing be that slow in responding? Obviously, a relationship with that company never developed. 5. Providing “Specials” that apply to NEW customers only. Nothing says “I value our long standing relationship and the loyalty you’ve shown us” as poorly as offering to sell your product or service to a brand new client for less than you’re charging your oldest, most loyal ones. 6. Perceived indifference – the most important in this list. You have invested good money in acquiring your customers, so you absolutely must treat them like gold by staying in touch with them and

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How to Effectively Kick-Start New Business Ventures

Helpful advice for those stuck in the ‘procrastination loop’: “Should I start a new business, or not?”   Some soar.   Many more crash.  Others merely survive.  The economy and competition have been a challenge for many small business owners.   So why in the world would anyone want to start a newbusiness in a rough economic climate? Simple. By implementing significantly more strategic plans and processes you can easily carve away market share from even the most established competitors as they struggle to survive the results of their considerably less-strategic way of doing business.  While they’re cutting costs, laying off employees and scaring away customers – you can be Johnny-on-the –spot to step into that void and have your new business fill those customers’ needs. So what factors contribute to the success of a survivor? According to certain experts, it’s an unwavering focus on growth and strategic business marketing.  Companies committed to growing their business when the economy is unfavorable will be much stronger and positioned to further outperform their competition when the economy bounces back. Business leaders know they will not achieve the success they desire tomorrow if they neglect their strategic business marketing efforts today.Several economic indicators suggest a recovery is around the corner.  Still others point to slow growth ahead.  Your competitors are most likely cutting back on their marketing efforts now, making it easier than ever for you to step in and go after their business.  The sooner you set your sights on growing your business – the better. Here are a few small business marketing initiatives you can start right now to kick-start your new business:   Small Business Marketing Initiatives Focus on Emotions: Zig Ziglar, the world famous sales trainer stated, “emotions drive buying decisions”.  People buy on emotion and then justify it with logic.  Marketing materials that focus on benefits appeal to customer emotions, while marketing materials that focus on features appeal to their logic.  Even customers who insist they are buying based on features, do so because it makes them feel good. Showcase Solutions: Feature unique or creative customer solutions on your website, newsletter, bulletin and other marketing materials to showcase your company’s talent to the marketplace.  Reinforce your commitment to the marketplace and inspire creative thinking throughout your organization. Benefits First: Focus on the benefits of the solution from the customer’s perspective vs. operational issues or product features. If possible, include a

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Does Your INTERNAL Customer “Get It?”

Effectively communicating with staff about business strategy is about selling the outcome, not the justification for its existence. You’ve created a master business strategy, but can you successfully communicate it to your staff so that it generates significant buy-in?  Or,  does it simply bounce off, boring your team and then gathering dust as they fail to execute it? Any good business coach will tell you that companies poised for significant growth must constantly change and adapt to both market and internal forces.  As such, they should perform regular monthly strategic reviews. There are 6 key outcomes to achieve from any strategy review, which you must regularly reinforce with your staff. Again, the purpose is communication of the outcome, rather than justification for its existence. Use bullet lists and diagrams to create communicable messages that all your employees  can absorb and, more importantly – execute.  The format is designed to act as a guide to inspire and motivate your staff, giving them a clear direction and the basic guidance needed to allow them to make smart decisions on the fly, utilizing their individuality and intelligence to achieve a common team goal.  Cut to the chase, allowing staff to get on board and get it done. The six components: Value Proposition Statement • Success in the language of the customer • A story which encapsulates your value proposition Goal Statement • “Define” success for the business The Business Model Diagram • How your business operates (one page)  One Page Business Plan |• Key milestones • Outcomes that create success Your Brand • Culture statements • Values List Your Unique Selling Proposition (USP) • Pre-emptive strategy against any type of competition So, your internal customers are not only just as important as the external variety, they are sometimes even more important.  You are aware that providing excellent customer service is a strong component of successful company operations.  However you may not be as knowledgeable regarding the key strategic nature of offering superior internal customer service.  Fear not.  This lack of understanding is often caused by a simple lack of communication and education. Although many companies stress the critical nature of internal customer service, most still do not.  Consider adopting superior internal customer service as a business priority, as you will find that it can do more to improve company operations than just about any other initiative you set in motion. For more information or

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Nobody Wins a Price War

Price wars are the nuclear option of the marketplace:  Nobody wins. When two companies are hell-bent on hacking away at each other through discounts and markdowns, one usually lands in bankruptcy while the survivor limps into an uncertain future. It’s almost always just a race to the bottom.  Nonetheless, there are certain scenarios that could make it easier for your business to survive a price war. Your best bet is to avoid price wars altogether, but if you find yourself headed toward one — you should know that there are only a few types of companies that are likely to come out on top: Big Money Companies The company with the biggest bank account clearly has the advantage in a price war. While the competition is worried about how to pay their bills, these companies can live off their reserves until the price war is over and they once again raise prices to normal levels. Diverse Companies Other price war survivors are companies that offer a wide range of products or services. If a price war erupts over a specific product, the impact is not nearly as dangerous as it would be if the company only had a single product offering. The bad news is that when a larger company decides to create a price war, they often slash prices across the board. Low-Cost Companies Some companies are built to be lean and mean in the marketplace. By intentionally structuring themselves to as a low-cost, no-frills alternative, these companies position themselves to survive price wars because they are inherently more capable of absorbing price reductions than the competition. Unfortunately, most small businesses don’t fall into any of these three categories. But even though they lack the money, diversity and cost-efficiency of larger competitors, small businesses have a unique ability to squeeze into a fourth category of price war survivors: Differentiated Companies Small businesses are very adept at identifying and exploiting gaps in the marketplace. For most small businesses, the implementation of non-price differentiation strategies is enough to help them survive a price war. This might mean leveraging your ability to provide personalized service or deciding to specialize in a specific market segment. Anticipate the needs of the marketplace and do whatever is necessary to survive until the price war ends and peace is once again restored to the marketplace. And remember that not all price wars involve actually lowering prices.

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Really, It DOESN’T Matter…

Do you know who your biggest competitor is? Do you know who is stealing your prospects’ attention and keeping them from buying your products or services? You might be surprised to learn that your biggest competitor isn’t the larger business down the street or around the corner.  It’s not the big box store or the mom-and-pop shop, and it’s not anyone on the internet. If you guessed any of these, they are certainly your competitors…but by no means your biggest one. So who IS your biggest competitor? It’s your prospective customer’s indifference. That’s right, indifference. They don’t see you as special or different or better in any way than anywhere else they can buy your product or service. So they buy elsewhere. Or they might buy from you once in a while out of convenience, but you’re not outperforming your competitors there, either. In order to overcome the indifference in your buying public, you need to identify what it is that they’re indifferent about.  Why do they see you the way they do, and more importantly what do they see in your competitors that is costing you some or all of the business you should be getting from them.? To identify strengths in your own company, you must first understand your competitors’ strengths – and weaknesses.  What is their positioning in the marketplace relative to yours? Identify the key features of your competitors’ product or service and contrast that with what you offer. Take the perspective of your customer, because it’s not so important how you see the differences but how your customers see them. What might be making your prospective buyers choose them over you, or vice-versa? Cost, reputation, image, brand identity? These are well known factors in the decision making process, but what are some others that are coming into play as your potential customers decide? Effective competitor analysis provides you with powerful insights for your overall competitive strategy. You can’t succeed if you approach the marketplace with blinders on. You need to know who your competitors are, what they’re doing, how you can effectively respond to their actions and how they will likely respond to yours. For example, competitors in the auto repair business might depend on reputation and quality of work, while clothing stores tend to compete on fashion trends and generation-specific looks. Buying decisions for automobiles may depend on style, reputation, safety and the associated status

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Setting Business Goals – Stop Moving The Goalpost

The importance of setting business goals cannot be overstated, but the fact is that most owners never bother to set clearly defined goals and objectives. And the ones who do usually abandon them and return to their reactive habits before any measurable improvement has been made. It’s like a field goal kicker trying to put it through the uprights while his own team keeps moving the goalpost. Sound familiar? Strategic business goals are critical to achieving improvements or changes in your business. Each goal should clearly state the objective, be accompanied by a written statement defining the benefits of achieving the goal and be measured by milestones to ensure continuing progress is evident. It may sound like a lot of extra work, but well worth it as this practice practically guarantees that your management of the business will remain proactive and productive. Here’s how it works. For example, if you were the owner of “Joe’s Pizza” and you offer both take-out and delivery, but your take-out sales are lagging. First, clearly define your goal and write it down. For example, “I want to increase take-out sales.” Next, follow these three simple rules to define the path to your objective: 1. Goals must be measurable. Successful companies always focus on setting business goals that can be measured. So you decide on a number – and stick to it. In this case it should be a sales or profit dollar amount, or a percentage increase over current figures. An example of a poor choice in this instance would be “units sold” as improvement would be difficult to measure given the widely varying prices of different types of pizza, sides etc. 2. Goals must have a deadline. Set a time frame for your stated objective. If Joe’s Pizza would like to increase sales by 30% over last year, it wouldn’t make sense to set a one month time frame for that goal. Measurable improvement will obviously require more time, and successful achievement of the goal won’t be known until well into the 12 month period. However, measuring improvement in milestones of this-month-this-year vs this-month-last-year will provide valuable insight into your progress. 3. Goals must be attainable. This seems intuitive but you would be surprised how frequently this rule is overlooked. Consider your knowledge of your industry and your competitors. While a 30% increase might seem ambitious, it is certainly attainable whereas a 300%

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Would You Buy Your Business If It Was For Sale?

Statistics show that on average a small business will change owners every five years or so. That means the longer you’ve owned your business, the closer you’re likely getting to selling it. Now, for those of you who are reading this and thinking “no way, I’ll never sell my company”…while that may be true – the content of this article is just as important to you if you’re allowing any of the issues we’ll cover to exist in your business. So, whether you’re going to be selling at some point, or you’re a fifth-generation owner running the family business that you’ll pass on to your kids someday, the strategies outlined here will make you more money until then. The key is to start thinking of your current business in terms of what someone looking to buy your company would see. Motivation: Let’s start with some business-valuation math. Small business sales are traditionally priced based on a formula called multiple of earnings. Simplified, it means that a prospective buyer considers what a business makes for its owner each year, and offers an amount usually between 1 and 3 times that value to buy the company. The multiple generally depends on how long the company has been in business, how competitive it is in the current market and how easily a new owner could assume control of the operation. Goals: What’s it going to take to make this happen? The first goal in improving the value of your business will be to increase your earnings, which is the first element in the valuation of your company. And, since we can’t change how long you’ve been in business (except by staying in business), the next goal is to improve the competitive positioning of your company in the marketplace. Finally, goal number three will be to transition your business to a model that runs itself with more of your guidance and less of your direct participation wherever possible. Again, those of you that feel like you should stop reading because you’ll “never sell”, hang in here for a few more paragraphs…this is going to make a ton of sense to you as well. Problems, Challenges, Headaches. If there is something going on in your company that would concern a potential buyer, chances are it’s taking a big toll on your ownership as well. The fact that you have been able to adapt or “work around” the

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