Are you looking for a bank loan or business angel to fund your business growth plans?
Do you understand the kind of things they look for in a company before they will invest?
Do you know what government finance is (still) available and how you qualify?
These are big issues. Succeed or fail issues. Don't leave it to chance - talk to us.
As a first step, get yourself on this business advice seminar or take a look at our business advice website.
Wednesday 29 December 2010
Wednesday 22 December 2010
Selling your business in the next two years?
Preparing in the right way could get you 2-3 times as much for your business.
Getting your company fit for sale could mean the difference between getting nothing and getting a great multiple.
It's what you as a business owner should spend your time doing.
Make a start. Come to this business advice seminar.
More information on our business advice website
Getting your company fit for sale could mean the difference between getting nothing and getting a great multiple.
It's what you as a business owner should spend your time doing.
Make a start. Come to this business advice seminar.
More information on our business advice website
Wednesday 15 December 2010
Business owner - need to raise your game?
· Reached the point where you are no longer confident about the way to to drive your business forward?
· Need money from an investor or bank to fund your growth plans but unsure how to go about it?
· Started to wonder if you or your management team need to understand more about business to achieve your goals?
· Worried about how you will achieve the best price when you sell your business?
Even successful and ambitious business owners sometimes find it hard to remember why they started their business. Dealing with day-to-day issues can swamp the big picture, leaving you struggling to keep on track and unsure about when and how you will realise the rewards for all the hard work you put in.
We can help you raise yoru game to overcome these barriers - and we're running this great seminar to explain how.
More good business advice on our website.
· Need money from an investor or bank to fund your growth plans but unsure how to go about it?
· Started to wonder if you or your management team need to understand more about business to achieve your goals?
· Worried about how you will achieve the best price when you sell your business?
Even successful and ambitious business owners sometimes find it hard to remember why they started their business. Dealing with day-to-day issues can swamp the big picture, leaving you struggling to keep on track and unsure about when and how you will realise the rewards for all the hard work you put in.
We can help you raise yoru game to overcome these barriers - and we're running this great seminar to explain how.
More good business advice on our website.
Friday 10 December 2010
Do you have a clear direction?
Clear direction - a vision, mission and strategic objectives - is essential for any successful business. Business owners ned to know:
· The importance of a motivating and guiding vision for any business and how to construct one
· Ways to turn your Vision into a compelling Mission for your staff and customers
· How to identify and set concrete Objectives that will keep you on track towards your goal whatever happens
· Why growth is not optional - and why unplanned growth will damage your business – and why growth itself brings challenges
· What successful business owners spend their time doing – and not doing
If you'd like to learn how to do this then this seminar is a must: The Road To Growth
More information on my website: http://www.nickbettes.co.uk/
· The importance of a motivating and guiding vision for any business and how to construct one
· Ways to turn your Vision into a compelling Mission for your staff and customers
· How to identify and set concrete Objectives that will keep you on track towards your goal whatever happens
· Why growth is not optional - and why unplanned growth will damage your business – and why growth itself brings challenges
· What successful business owners spend their time doing – and not doing
If you'd like to learn how to do this then this seminar is a must: The Road To Growth
More information on my website: http://www.nickbettes.co.uk/
Monday 29 November 2010
Are you serious?
Yet another dicsussion on LinkedIn over whether businesses should have to grow or not (see the NRG-Networks group)
It's simple. There are two different types of business owner. Those who think it's their job to produce widgets (or build websites, or fit boilers, or sell insurance...) and those who think it's their job to build a business.
The first type are really just self-employed. The second type are the true business owners. They are focused on driving their business forward. They spend time thinking about how they get to the next step. They invest in their company and themselves so that they can achieve that next step - because they know that it will take a bigger strategy, a better plan, a tighter operation and more teamwork.
These business owners will spend time planning for when they come to sell their business. Or maybe they're wondering about getting money from a venture capitalist, business angel, government agency or bank to fund growth plans. They recognise when they reach the point where they and their management team become the limitation on the company's growth and they need to step back and change the way the busines operates. Success in any of these scenarios requires them to raise their game.
If you're one of the second type (true business owners) then you recognise the value of getting expert help. You will probably want to click here for your free copy of the white paper "Raising Your Game" which addresses the challenges you'll face.
It's simple. There are two different types of business owner. Those who think it's their job to produce widgets (or build websites, or fit boilers, or sell insurance...) and those who think it's their job to build a business.
The first type are really just self-employed. The second type are the true business owners. They are focused on driving their business forward. They spend time thinking about how they get to the next step. They invest in their company and themselves so that they can achieve that next step - because they know that it will take a bigger strategy, a better plan, a tighter operation and more teamwork.
These business owners will spend time planning for when they come to sell their business. Or maybe they're wondering about getting money from a venture capitalist, business angel, government agency or bank to fund growth plans. They recognise when they reach the point where they and their management team become the limitation on the company's growth and they need to step back and change the way the busines operates. Success in any of these scenarios requires them to raise their game.
If you're one of the second type (true business owners) then you recognise the value of getting expert help. You will probably want to click here for your free copy of the white paper "Raising Your Game" which addresses the challenges you'll face.
Thursday 11 November 2010
Use IT Effectively To Boost Business Performance
How do you apply IT to boost business performance?
1. Set clear business direction as a prerequisite for the effective use of IT. This of course applies to the effective use of all parts of a business - marketing or operations or HR - but you'd be surprised at the number of companies, small and large, who don't have a clearly-articulated direction or if they do don't apply it to IT decisions.
2. Ensure your IT strategy and roadmap supports your business strategy. IT should not be an afterthought and IT decisions should not be based just on the internal requirement to get things done. All major IT decisions and investments should move the business in the desired direction and add to the bottom line, not subtract from it.
3. Understand what is important to your customers and how your IT helps you deliver this. All IT projects should improve the experience for your customers - possibly by improving the experience for your staff.
4. Having decided what you need IT to deliver then evaluate the impact of your choices about IT infrastructure and management on profit.
If you want to learn more about this then why not book online for this seminar on Using IT To Boost Business Performance?
My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.
If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator
1. Set clear business direction as a prerequisite for the effective use of IT. This of course applies to the effective use of all parts of a business - marketing or operations or HR - but you'd be surprised at the number of companies, small and large, who don't have a clearly-articulated direction or if they do don't apply it to IT decisions.
2. Ensure your IT strategy and roadmap supports your business strategy. IT should not be an afterthought and IT decisions should not be based just on the internal requirement to get things done. All major IT decisions and investments should move the business in the desired direction and add to the bottom line, not subtract from it.
3. Understand what is important to your customers and how your IT helps you deliver this. All IT projects should improve the experience for your customers - possibly by improving the experience for your staff.
4. Having decided what you need IT to deliver then evaluate the impact of your choices about IT infrastructure and management on profit.
If you want to learn more about this then why not book online for this seminar on Using IT To Boost Business Performance?
My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.
If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator
Monday 1 November 2010
Manage your time, grow your profits
As a business owner or director your available time limits the growth and performance of your business unless you manage it properly.
How can you manage your time better?
- Schedule a weekly review with yourself. Set aside the same 15 minutes at the start or end of each week to write down the things that were achieved/missed in the past week and the things to be achieved in the next week
- Don’t just react to the latest stimulus. When a task or interruption appears, train yourself to decide what is urgent, what is important, what is both and what is neither and prioritise accordingly
- Start each day with a written list of things you are going to achieve that day and review the list at the end of the day
- Time-box your day - have targets for the next hour, by lunchtime, before I have a coffee...
- Set aside a time each day when you will accept NO distractions
- Have a schedule for everything that happens regularly - and stick to it
- Delegate everything unless there is a compelling reason not to. Aim to deskill tasks and process them using the lowest-cost resource. Taking responsibility for the things that distract you may well enrich the role of someone more junior
- Fix things for the long term. If you do have to break-off to deal with an unplanned issue don’t deal only with today’s interruption or distraction – understand the root cause and remove it, look at the trend and educate the people involved, set up simple processes, scripts, forms or rules to handle similar events in future
- Turn email alerts off. If you have an assistant, set them up with access to your email and get them to deal with everything they can, delete the junk and just leave the important stuff that you have to do yourself
- Set aside a time each day to deal with email – don’t look at it before that time and stop dealing with emails at the end of that period
Make sure that every day you have done something to make the business less reliant upon you.
My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.
If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator
How can you manage your time better?
- Schedule a weekly review with yourself. Set aside the same 15 minutes at the start or end of each week to write down the things that were achieved/missed in the past week and the things to be achieved in the next week
- Don’t just react to the latest stimulus. When a task or interruption appears, train yourself to decide what is urgent, what is important, what is both and what is neither and prioritise accordingly
- Start each day with a written list of things you are going to achieve that day and review the list at the end of the day
- Time-box your day - have targets for the next hour, by lunchtime, before I have a coffee...
- Set aside a time each day when you will accept NO distractions
- Have a schedule for everything that happens regularly - and stick to it
- Delegate everything unless there is a compelling reason not to. Aim to deskill tasks and process them using the lowest-cost resource. Taking responsibility for the things that distract you may well enrich the role of someone more junior
- Fix things for the long term. If you do have to break-off to deal with an unplanned issue don’t deal only with today’s interruption or distraction – understand the root cause and remove it, look at the trend and educate the people involved, set up simple processes, scripts, forms or rules to handle similar events in future
- Turn email alerts off. If you have an assistant, set them up with access to your email and get them to deal with everything they can, delete the junk and just leave the important stuff that you have to do yourself
- Set aside a time each day to deal with email – don’t look at it before that time and stop dealing with emails at the end of that period
Make sure that every day you have done something to make the business less reliant upon you.
My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.
If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator
Monday 18 October 2010
How to deliver great customer service
Why is customer service so important?
- In the long run, good customer service is the only way to grow a successful business. Satisfied customers come back to buy more and also tell other potential customers about your service
- Good customer service forms a virtuous circle with employee satisfaction. People like to work for a business that they can be proud of and they like being able to make customers happy
- Poor service will produce the opposite effects and eventually destroy a business
What are the key elements in good customer service?
- Communication
o Understand your customer categories and the benefits they seek
o Engage customers in product development and service improvements
o Respond quickly and effectively to enquiries via the people who can provide the best solution to their need
o Agree with each client up-front what is to be delivered and how success will be measured
o Be accessible to customers at all their preferred times and using all their preferred channels
o Measure customer satisfaction regularly, publish the results and make sure the results provide a basis for action – then take it
- Culture
o Make explicit your values that tell everyone the customer is the top priority
o Train all employees in customer service and your values and then empower them to do what it takes to deliver great customer service
o Have an accessible complaints procedure focused on resolving the issue for all customers and all time
o Measure customer service and reward or acknowledge individuals who excel
o Do not tolerate poor customer service
- Processes and outcomes
o Define how you measure good customer service in your business and what key performance indicators (KPIs) are relevant for controlling the end-to-end process
o Include targets for these measures for all staff and review performance monthly and annually. Include them in your incentivisation scheme if you run one
o Publish actual performance figures against target
o Carry out regular and post-project reviews. Learn from mistakes and successes and capture improvements in revised processes
o Benchmark against the best performers inside and outside your industry
My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.
If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator
- In the long run, good customer service is the only way to grow a successful business. Satisfied customers come back to buy more and also tell other potential customers about your service
- Good customer service forms a virtuous circle with employee satisfaction. People like to work for a business that they can be proud of and they like being able to make customers happy
- Poor service will produce the opposite effects and eventually destroy a business
What are the key elements in good customer service?
- Communication
o Understand your customer categories and the benefits they seek
o Engage customers in product development and service improvements
o Respond quickly and effectively to enquiries via the people who can provide the best solution to their need
o Agree with each client up-front what is to be delivered and how success will be measured
o Be accessible to customers at all their preferred times and using all their preferred channels
o Measure customer satisfaction regularly, publish the results and make sure the results provide a basis for action – then take it
- Culture
o Make explicit your values that tell everyone the customer is the top priority
o Train all employees in customer service and your values and then empower them to do what it takes to deliver great customer service
o Have an accessible complaints procedure focused on resolving the issue for all customers and all time
o Measure customer service and reward or acknowledge individuals who excel
o Do not tolerate poor customer service
- Processes and outcomes
o Define how you measure good customer service in your business and what key performance indicators (KPIs) are relevant for controlling the end-to-end process
o Include targets for these measures for all staff and review performance monthly and annually. Include them in your incentivisation scheme if you run one
o Publish actual performance figures against target
o Carry out regular and post-project reviews. Learn from mistakes and successes and capture improvements in revised processes
o Benchmark against the best performers inside and outside your industry
My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.
If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator
Monday 4 October 2010
How resilient is your turnover?
Not all revenue is equally certain. A business which relies on winning a small number of large contracts each year may well earn the same revenue and profit as a business that gets its income from a large volume of contracted subscriptions and a third company that gets all its income from ad-hoc repair and maintenance across a moderate number of existing customers
o In theory, the riskier nature of the project business should result in higher profit margins (returns to the shareholders) and the stable nature of the subscription business, lower - but this is not always the case in practice
o Don’t confuse spreading payments for a project with spreading both the cost and the income by using a different business model. The first impacts cash flow and actually increases risk – so should require an even higher return.
All other things being equal, businesses should strive for as much locked-in recurring revenue as possible
How can you translate one-off into recurring revenue? Some examples of spreading payments are
o A photocopier which is paid for by charging a small amount for every copy made
o Mobile phones, where the phone is given free in return for a fixed term monthly contract
Each of these relies on a higher total income over the life of the contract to cover the cash flow hit and the risk of default. It is also necessary to build in a compelling proposition to renew the contract before it expires in order to build revenue resilience
Some examples of additional recurring revenue are
o Software license maintenance
o Membership of a user group
o Subscription services
o Service and maintenance contracts
An alternative way of looking at this is separating future income from resource or asset limitations
o Translate a single consultant’s time into a course to be sold online in perpetuity
What is the proposition for the customer? Possible benefits that would induce a customer to sign up for a long-term contract are
o Access to a continuous stream of new content
o Access to special offers and discounts
o A known fixed charge covering all repairs (a form of insurance)
o The right to free future upgrades
o Continuous tuning & maintenance of the original product
One final source of revenue risk is over-reliance on a single or a few customers (high customer concentration) – avoid this.
See how I can make your business more profitable.
See how my services could make your business worth more
Want to see videos of my seminars for business owners?
o In theory, the riskier nature of the project business should result in higher profit margins (returns to the shareholders) and the stable nature of the subscription business, lower - but this is not always the case in practice
o Don’t confuse spreading payments for a project with spreading both the cost and the income by using a different business model. The first impacts cash flow and actually increases risk – so should require an even higher return.
All other things being equal, businesses should strive for as much locked-in recurring revenue as possible
How can you translate one-off into recurring revenue? Some examples of spreading payments are
o A photocopier which is paid for by charging a small amount for every copy made
o Mobile phones, where the phone is given free in return for a fixed term monthly contract
Each of these relies on a higher total income over the life of the contract to cover the cash flow hit and the risk of default. It is also necessary to build in a compelling proposition to renew the contract before it expires in order to build revenue resilience
Some examples of additional recurring revenue are
o Software license maintenance
o Membership of a user group
o Subscription services
o Service and maintenance contracts
An alternative way of looking at this is separating future income from resource or asset limitations
o Translate a single consultant’s time into a course to be sold online in perpetuity
What is the proposition for the customer? Possible benefits that would induce a customer to sign up for a long-term contract are
o Access to a continuous stream of new content
o Access to special offers and discounts
o A known fixed charge covering all repairs (a form of insurance)
o The right to free future upgrades
o Continuous tuning & maintenance of the original product
One final source of revenue risk is over-reliance on a single or a few customers (high customer concentration) – avoid this.
See how I can make your business more profitable.
See how my services could make your business worth more
Want to see videos of my seminars for business owners?
Wednesday 22 September 2010
Why systemised businesses are worth more
The value of a business depends on its growth prospects, profitability, cash conversion and the degree to which that future cash flow is at risk
o One of the main risks for small businesses is their reliance upon key personnel, particularly the owner, who know and do things that no-one else knows or can do
o This risk is present even if you have no plans to sell the business. If you the owner or one of your key staff are unable to work for an extended period what happens to your business?
o Systemisation is the process by which the processes of the business are documented and standardised and reliance on any one individual is removed
o This process also makes a business scalable; the processes can be replicated, additional staff can be selected and trained and the business can grow beyond the constraints of any one person
How can a business be systemised?
- Document all your processes. Start by asking all your staff (including you) what they spend their time doing and build up a diagram of the different flows of work from the start (say a customer enquiry) to the end (say an invoice paid)
o Post-it notes are a good way to do this. Use different colours for different people or departments and put a different task on each note. Record key dimensions on each task – how many times, how often, how long it takes. Record problems or issues with the task. Organise the notes into sequences of tasks (processes)
o Turn the hierarchy and sequence of notes into your draft written operating manual
- Identify where only one person has the skills to carry out a particular task and examine ways to enable more people to do this
o Delegation and recruitment
o Training
o Cross-skilling, so that people can turn their hand to multiple roles
o Altering the task so that it becomes less specialised
- Look for opportunities to improve processes
o Complexity that has arisen for no good reason over time
o Bottlenecks
o Different ways of carrying out what is essentially the same task
o Specialised resources being used for mundane tasks
- Automate where this is practical
o Streamline and speed processes up using computers and the internet
o Look for opportunities to provide self-service – this reduces cost and improves customer service
- Finalise and issue the operating manual
o Institute regular audits to ensure the manual and the reality match
- Starting with you, the owner, develop a succession plan
o Named individuals selected or recruited to replace the people above them
o The appropriate development plans in place for these individuals
See how my services could help your business.
See how my services could make your business worth more
Want to see videos of my seminars for business owners?
o One of the main risks for small businesses is their reliance upon key personnel, particularly the owner, who know and do things that no-one else knows or can do
o This risk is present even if you have no plans to sell the business. If you the owner or one of your key staff are unable to work for an extended period what happens to your business?
o Systemisation is the process by which the processes of the business are documented and standardised and reliance on any one individual is removed
o This process also makes a business scalable; the processes can be replicated, additional staff can be selected and trained and the business can grow beyond the constraints of any one person
How can a business be systemised?
- Document all your processes. Start by asking all your staff (including you) what they spend their time doing and build up a diagram of the different flows of work from the start (say a customer enquiry) to the end (say an invoice paid)
o Post-it notes are a good way to do this. Use different colours for different people or departments and put a different task on each note. Record key dimensions on each task – how many times, how often, how long it takes. Record problems or issues with the task. Organise the notes into sequences of tasks (processes)
o Turn the hierarchy and sequence of notes into your draft written operating manual
- Identify where only one person has the skills to carry out a particular task and examine ways to enable more people to do this
o Delegation and recruitment
o Training
o Cross-skilling, so that people can turn their hand to multiple roles
o Altering the task so that it becomes less specialised
- Look for opportunities to improve processes
o Complexity that has arisen for no good reason over time
o Bottlenecks
o Different ways of carrying out what is essentially the same task
o Specialised resources being used for mundane tasks
- Automate where this is practical
o Streamline and speed processes up using computers and the internet
o Look for opportunities to provide self-service – this reduces cost and improves customer service
- Finalise and issue the operating manual
o Institute regular audits to ensure the manual and the reality match
- Starting with you, the owner, develop a succession plan
o Named individuals selected or recruited to replace the people above them
o The appropriate development plans in place for these individuals
See how my services could help your business.
See how my services could make your business worth more
Want to see videos of my seminars for business owners?
Wednesday 15 September 2010
Improving productivity
What is meant by “productivity”?
- Productivity is a measure of output for some measure of input
- Productivity has huge impact on profitability as shown in the table
- This approach applies to services as well as products
How can productivity be improved?
- Decide what it is you produce (the output) – this may not be obvious in a service business
- Identify the main costs or resources utilised in production (the inputs)
- Define your productivity measure(s) – in the above table it is labour hours/item
- Monitor productivity over time and between different employees or resources
- If the main productivity factor is labour then improvements can be made in training, supervision, communication, standardisation, documentation, tools, systems or support
- For non-labour measures examine product or process design
See how my services could help your business.
See how my services could make your business worth more
Want to see videos of my seminars for business owners?
- Productivity is a measure of output for some measure of input
- Maintenance visits per hour of direct labour
- Cakes sold per hour of shop assistant labour
- Boxes produced per square metre of steel
- Helpdesk calls closed per man-month
- For your business you can choose whatever measures are most useful
- Productivity has huge impact on profitability as shown in the table
- The company has 8,000 hours per year of productive labour. The budget is based on these hours producing 100 items which results in a 10% profit.
- A 10% improvement in productivity (each person on average producing 10% more in a given period) results in a doubling of profit
- A 10% deterioration in productivity results in no profit being made at all
- This approach applies to services as well as products
How can productivity be improved?
- Decide what it is you produce (the output) – this may not be obvious in a service business
- Identify the main costs or resources utilised in production (the inputs)
- Define your productivity measure(s) – in the above table it is labour hours/item
- Monitor productivity over time and between different employees or resources
- If the main productivity factor is labour then improvements can be made in training, supervision, communication, standardisation, documentation, tools, systems or support
- For non-labour measures examine product or process design
Monday 6 September 2010
Market triggers
What are market triggers?
- Most products and services have some kind of event that triggers the customer need
- These triggers may be seasonal (school uniform, umbrellas), calendar-driven (payroll, VAT returns) or ad-hoc (marriage, moving house)
Why should you understand your market triggers?
- Understanding your market triggers will help you to position your product or service where it is most likely to catch the customer at the right time or place
o If you run a carpet cleaning company then demand for your services might be triggered by someone moving into a new home – so post leaflets through the doors of houses with “sold” signs
o If you print business cards and stationary then demand for your services might be triggered by someone setting up a new company – so subscribe to a company registration data service and send start-ups a brochure
- Understanding the customer motivation will help you best meet their needs and so improve sales conversion rate
o Make it part of scripts and qualification to ask why the prospect is looking for your product or service
- It will help you cross-sell or up-sell other services related to the trigger
o Someone who gets divorced may well need a new will
o Someone who hires a lot of new staff may well need employment policies
- It will suggest related complementary services and so which strategic alliances would be beneficial to you
o Solicitors will form alliances with estate agents to get access to conveyancing work
See how my services could help your business.
See how my services could make your business worth more
Want to see videos of my seminars for business owners?
- Most products and services have some kind of event that triggers the customer need
- These triggers may be seasonal (school uniform, umbrellas), calendar-driven (payroll, VAT returns) or ad-hoc (marriage, moving house)
Why should you understand your market triggers?
- Understanding your market triggers will help you to position your product or service where it is most likely to catch the customer at the right time or place
o If you run a carpet cleaning company then demand for your services might be triggered by someone moving into a new home – so post leaflets through the doors of houses with “sold” signs
o If you print business cards and stationary then demand for your services might be triggered by someone setting up a new company – so subscribe to a company registration data service and send start-ups a brochure
- Understanding the customer motivation will help you best meet their needs and so improve sales conversion rate
o Make it part of scripts and qualification to ask why the prospect is looking for your product or service
- It will help you cross-sell or up-sell other services related to the trigger
o Someone who gets divorced may well need a new will
o Someone who hires a lot of new staff may well need employment policies
- It will suggest related complementary services and so which strategic alliances would be beneficial to you
o Solicitors will form alliances with estate agents to get access to conveyancing work
See how my services could help your business.
See how my services could make your business worth more
Want to see videos of my seminars for business owners?
Tuesday 24 August 2010
A big sales technique for small businesses
- Consultative selling, or solutions selling , is a technique used by big companies for complex sales. However, it can be used by SMEs for business-to-business (B2B) or even business-to-consumer (B2C) selling. The essence is to go beyond the stated requirement to understand your prospects’ needs and explain how your product or service meets those needs better than anyone else’s.
Preparation:
- Research on the customer (for B2B - turnover, growth, products, stated aims, stated strategies, culture and strengths. For B2C – the benefits your various customer types are looking for);
- Research on the market (emerging trends, main players, size, growing/shrinking, macro-economic factors eg is the market driven by the housing market or unemployment);
Set the scene:
- For planned meetings send an agenda/have a pre-meeting telephone call that sets the expectation that you are interested in how your product or service can help the prospect achieve their aims – you are not turning up to talk about features or technology
- For unplanned (eg in a shop) make sure you have a script that engages the prospect in a discussion about their needs
The discussion:
- For B2B, set out to understand the following things:
o What the company produces
o How many/how much they produce
o What is important to their customers
o What is their USP?
o How do they get the best from their staff?
o What are the top three challenges they are facing?
- For B2C, set out to understand the experience they are seeking
o In a shoe shop, don’t ask “Can I help you?” ask “Are you looking for shoes with a special event in mind?”
o If someone rings about a new carpet ask them “What does the room feel like?” or “What atmosphere are you trying to create?”
- Explore with open questions (that require a descriptive answer) and confirm your understanding with closed questions (that can be answered Yes or No)
- Listen, listen, listen
- Explain to them how your product or service helps them achieve this
o Point by point match benefit to need
o Use their own language
o Don’t assume they will recognise all the benefits you are offering without you telling them
More business advice for business owners.
How do you value your business?
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Preparation:
- Research on the customer (for B2B - turnover, growth, products, stated aims, stated strategies, culture and strengths. For B2C – the benefits your various customer types are looking for);
- Research on the market (emerging trends, main players, size, growing/shrinking, macro-economic factors eg is the market driven by the housing market or unemployment);
Set the scene:
- For planned meetings send an agenda/have a pre-meeting telephone call that sets the expectation that you are interested in how your product or service can help the prospect achieve their aims – you are not turning up to talk about features or technology
- For unplanned (eg in a shop) make sure you have a script that engages the prospect in a discussion about their needs
The discussion:
- For B2B, set out to understand the following things:
o What the company produces
o How many/how much they produce
o What is important to their customers
o What is their USP?
o How do they get the best from their staff?
o What are the top three challenges they are facing?
- For B2C, set out to understand the experience they are seeking
o In a shoe shop, don’t ask “Can I help you?” ask “Are you looking for shoes with a special event in mind?”
o If someone rings about a new carpet ask them “What does the room feel like?” or “What atmosphere are you trying to create?”
- Explore with open questions (that require a descriptive answer) and confirm your understanding with closed questions (that can be answered Yes or No)
- Listen, listen, listen
- Explain to them how your product or service helps them achieve this
o Point by point match benefit to need
o Use their own language
o Don’t assume they will recognise all the benefits you are offering without you telling them
More business advice for business owners.
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Monday 16 August 2010
Why qualifying sales will help sales grow
Why do you need to qualify sales leads?
- The process which takes a lead through to a sale (the conversion process) can consume a lot of resources, particularly for complex sales
- This process is much more productive (that is, has a higher conversion rate and uses less resource) if those leads which are likely to be low value and/or unlikely to result in a sale are screened out earlier in the process
- If the conversion process has very low marginal costs (eg an online shop) then the need for qualification is correspondingly lower
What factors can be used to qualify sales leads?
- The factors can vary widely according to the industry you are in but could include:
o Are you talking to the decision-maker and budget-holder?
o Are they in your target market and the right type and size of customer?
o Do they have the funds or budget to buy your product?
o Do they have the compelling need, commitment and motivation to buy now?
o Can you provide what they need without stretching your product, credibility or resources?
o Do you have all the necessary pre-qualifications (policies, accreditations, size and stability)?
o Is there an incumbent or preferred supplier who is almost certain to win the business?
How are leads qualified?
- Qualification should be part of your sales process
o It should also be built into your marketing
- It could take place at a single point or you could have several stages of qualification
- The criteria for qualification (taken, for example, from the above list) should be recorded against each lead in your sales management system
- The conversion process results (wins and losses) should feed back into the qualification process
o A low conversion rate may well indicate poor qualification
More business advice for business owners.
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- The process which takes a lead through to a sale (the conversion process) can consume a lot of resources, particularly for complex sales
- This process is much more productive (that is, has a higher conversion rate and uses less resource) if those leads which are likely to be low value and/or unlikely to result in a sale are screened out earlier in the process
- If the conversion process has very low marginal costs (eg an online shop) then the need for qualification is correspondingly lower
What factors can be used to qualify sales leads?
- The factors can vary widely according to the industry you are in but could include:
o Are you talking to the decision-maker and budget-holder?
o Are they in your target market and the right type and size of customer?
o Do they have the funds or budget to buy your product?
o Do they have the compelling need, commitment and motivation to buy now?
o Can you provide what they need without stretching your product, credibility or resources?
o Do you have all the necessary pre-qualifications (policies, accreditations, size and stability)?
o Is there an incumbent or preferred supplier who is almost certain to win the business?
How are leads qualified?
- Qualification should be part of your sales process
o It should also be built into your marketing
- It could take place at a single point or you could have several stages of qualification
- The criteria for qualification (taken, for example, from the above list) should be recorded against each lead in your sales management system
- The conversion process results (wins and losses) should feed back into the qualification process
o A low conversion rate may well indicate poor qualification
More business advice for business owners.
How do you value your business?
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Tuesday 10 August 2010
Why do so many small businesses fail?
Why do so many small businesses fail?
This topic generated over 50 comments on a LinkedIn forum recently. This counts as a furore in the restrained atmosphere of LinkedIn Groups.
Comments came from a range of business owners, with perhaps a preponderance of those who advise other businesses. Whilst this skewed the comments made it also ensured that there was considerable experience of the reasons why UK SMEs survive or fail.
I counted up the reasons put forward – a completely unscientific analysis of a self-selecting group but interesting nevertheless. The reasons put forward were:
1. Owner's attitude/mental strength/direction/native ability/intelligence (8 mentions)
2. Business management knowledge and willingness to take advice (7 mentions)
3. Sales ability (6 mentions)
4. Financial understanding and control, particularly of cash flow (6 mentions)
5. USP/great idea or product, effective market research (5 mentions)
6. Business planning (3 mentions)
Also mentioned were: Customer understanding, luck, banks, pricing and contracts.
Not the ranking I would have come up with at the start I must confess. It prompts the question: If this ranking is reflective of anything like the actual reasons, what interventions are actually likely to be most effective?
Postscript: Whilst preparing this blog I met the owner of a design and branding company who is in his tenth year of business and expecting to turnover £1.5m this year. He and his partner have been using the latest of a series of advisors for the last 9 months - a series which started with a mentor when they set up the business. We talked about their plans to take on a shared FD shortly - not to control the finances but to raise their strategic game.
Perhaps businesses that are smart enough to know when they need advice and are willing to invest in it stand a better chance of survival.
More business advice for business owners.
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This topic generated over 50 comments on a LinkedIn forum recently. This counts as a furore in the restrained atmosphere of LinkedIn Groups.
Comments came from a range of business owners, with perhaps a preponderance of those who advise other businesses. Whilst this skewed the comments made it also ensured that there was considerable experience of the reasons why UK SMEs survive or fail.
I counted up the reasons put forward – a completely unscientific analysis of a self-selecting group but interesting nevertheless. The reasons put forward were:
1. Owner's attitude/mental strength/direction/native ability/intelligence (8 mentions)
2. Business management knowledge and willingness to take advice (7 mentions)
3. Sales ability (6 mentions)
4. Financial understanding and control, particularly of cash flow (6 mentions)
5. USP/great idea or product, effective market research (5 mentions)
6. Business planning (3 mentions)
Also mentioned were: Customer understanding, luck, banks, pricing and contracts.
Not the ranking I would have come up with at the start I must confess. It prompts the question: If this ranking is reflective of anything like the actual reasons, what interventions are actually likely to be most effective?
Postscript: Whilst preparing this blog I met the owner of a design and branding company who is in his tenth year of business and expecting to turnover £1.5m this year. He and his partner have been using the latest of a series of advisors for the last 9 months - a series which started with a mentor when they set up the business. We talked about their plans to take on a shared FD shortly - not to control the finances but to raise their strategic game.
Perhaps businesses that are smart enough to know when they need advice and are willing to invest in it stand a better chance of survival.
More business advice for business owners.
How do you value your business?
Want to see videos of my seminars for business owners?
Monday 26 July 2010
Customer benefits and their costs
A customer buys a package of benefits when they buy your product or service
- Some of these benefits are more important than others to your customer – some they may not want or value at all, some are critical and some they may not even realise they get. This will be different for each customer
- Some of these benefits cost you more than others to provide – some cost you a lot and some are free – or may even reduce your costs
- If you understand the relative value and cost then this allows you to make adjustments to your product, pricing and proposition so that you optimise revenue and margin
o This is the basis of the low-cost airline model. The benefits that were removed were valued less by passengers than the price reduction made possible by re-designing the airline process
How can I use this in my small business?
- Make sure that you understand all the benefits included in your product or service and that they are highlighted in your proposition
- If appropriate, develop different services to incorporate different packages of benefits (gold, silver and bronze for instance)
- In individual cases, understanding relative costs and benefits will help you negotiate with the customer
o You can make sure that they are comparing like with like in terms of the complete benefits package by you and your competition
o You can discuss which benefits they are prepared to forgo if they are asking for a price reduction
o You can offer additional benefits that cost you little or nothing but which the customer values in order to close a deal
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- Some of these benefits are more important than others to your customer – some they may not want or value at all, some are critical and some they may not even realise they get. This will be different for each customer
- Some of these benefits cost you more than others to provide – some cost you a lot and some are free – or may even reduce your costs
- If you understand the relative value and cost then this allows you to make adjustments to your product, pricing and proposition so that you optimise revenue and margin
o This is the basis of the low-cost airline model. The benefits that were removed were valued less by passengers than the price reduction made possible by re-designing the airline process
How can I use this in my small business?
- Make sure that you understand all the benefits included in your product or service and that they are highlighted in your proposition
- If appropriate, develop different services to incorporate different packages of benefits (gold, silver and bronze for instance)
- In individual cases, understanding relative costs and benefits will help you negotiate with the customer
o You can make sure that they are comparing like with like in terms of the complete benefits package by you and your competition
o You can discuss which benefits they are prepared to forgo if they are asking for a price reduction
o You can offer additional benefits that cost you little or nothing but which the customer values in order to close a deal
More business advice for business owners.
How do you value your business?
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Monday 19 July 2010
Why a business owner needs vision
Why have a Vision Statement?
- The purpose of creating a Vision Statement is to provide you, the business owner, with a clear picture of what you are going to achieve through owning your business
- One of the seven habits of effective leaders (as defined by Steven Covey) is that they always start with the end in mind. Even if your eventual exit from your business is many years away it will be worth far more and the exit process will be far easier if everything you do contributes to that exit
- If you do not have a clear vision how will you know which path to take or which decision to make? A clear vision will help you make those key decisions along the way
- The vision for your business will help you set short, mid and long-term objectives. When you set those objectives you should ask yourself how they contribute to achieving your vision
- The vision for your business will help you evaluate how you spend your time. Ask yourself frequently “How does this activity help me achieve my vision?” If it doesn’t, why are you doing it?
- It will help you communicate what is different and better about your business to staff and customers
What makes a good Vision Statement?
- It must be motivating for you. It must be something that you think is worth achieving and which matches your values and beliefs
- It should describe a particular point in time. This might be when you plan to exit or when you plan to achieve “success” as you see it. It should have a date
- It should describe what the business will be in concrete terms – how large, what it will be known for, what it will be able to do
- It should have a personal goal that describes how you will be spending your life. This might include your working life or your personal life or the options you would have by then
- It should have some concrete financial dimension – usually sale value, turnover or profit
- It should be written down
What do you do with your Vision Statement when you’ve got one?
- Use it to develop your internal and external Mission Statements which communicate to staff and customers what it is you do and why. (You wouldn’t normally share your Vision Statement directly with anyone else)
- Read it frequently. Use visioning or affirmations to picture yourself and your business at the point of the vision and look backwards at all the choices you made, the successes you had and the obstacles you overcame to get there – starting with the things you are doing today
- Use it to set your short, medium and long-term objectives and to validate your current strategy and decisions
More business advice for business owners.
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- The purpose of creating a Vision Statement is to provide you, the business owner, with a clear picture of what you are going to achieve through owning your business
- One of the seven habits of effective leaders (as defined by Steven Covey) is that they always start with the end in mind. Even if your eventual exit from your business is many years away it will be worth far more and the exit process will be far easier if everything you do contributes to that exit
- If you do not have a clear vision how will you know which path to take or which decision to make? A clear vision will help you make those key decisions along the way
- The vision for your business will help you set short, mid and long-term objectives. When you set those objectives you should ask yourself how they contribute to achieving your vision
- The vision for your business will help you evaluate how you spend your time. Ask yourself frequently “How does this activity help me achieve my vision?” If it doesn’t, why are you doing it?
- It will help you communicate what is different and better about your business to staff and customers
What makes a good Vision Statement?
- It must be motivating for you. It must be something that you think is worth achieving and which matches your values and beliefs
- It should describe a particular point in time. This might be when you plan to exit or when you plan to achieve “success” as you see it. It should have a date
- It should describe what the business will be in concrete terms – how large, what it will be known for, what it will be able to do
- It should have a personal goal that describes how you will be spending your life. This might include your working life or your personal life or the options you would have by then
- It should have some concrete financial dimension – usually sale value, turnover or profit
- It should be written down
What do you do with your Vision Statement when you’ve got one?
- Use it to develop your internal and external Mission Statements which communicate to staff and customers what it is you do and why. (You wouldn’t normally share your Vision Statement directly with anyone else)
- Read it frequently. Use visioning or affirmations to picture yourself and your business at the point of the vision and look backwards at all the choices you made, the successes you had and the obstacles you overcame to get there – starting with the things you are doing today
- Use it to set your short, medium and long-term objectives and to validate your current strategy and decisions
More business advice for business owners.
How do you value your business?
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Monday 12 July 2010
Why customers leave
- The most-often quoted study is one attributed to, variously, The American Society for Quality, the US Chambers of Commerce and a book called “Lessons from the Field” by Howard Feiertag and John Hogan. This gives the following reasons for customers leaving:
o Death or moving away – 4%
o The influence of friends and relatives – 5%
o Competitor marketing and special offers – 9%
o Dissatisfaction with product or price – 14%
o Perceived indifference of the supplier – 68%
- A study by RightNow Technologies says
o 73% of customers leave because of poor customer service but the supplier thinks that only 21% leave because of customer service
o The supplier thinks 48% leave because of price when in fact only 25% do so
- Mercer Management Consulting research shows that for a selection of retail outlets, only 15% to 30% of customers are price sensitive – that is, they would change supplier for a better price
- So retaining customers is not (usually) about price – it’s about letting the customer know you care
So if you love your customers can you charge what you like?
- No. You have to be competitive in your market - but superior customer care and marketing mix (USP, positioning and so forth) means you get to keep most of your customers and still charge a premium
- Low prices won’t keep customers if they think you are indifferent to them. Worse, using low prices attracts disloyal customers. The worst strategy of all is using low prices to make up for the fact that you and your staff really don’t care
It’s really difficult and expensive to get all my staff to provide great customer service
- It might seem so to start with – but the rewards are huge
o According to a study by the global business consulting firm Baines a 5% increase in customer retention can increase a company’s profitability by 75%
o Reichheld and Sasser reported that when MBNA America reduced its 10% defection rate to 5% their profits rose by 125%
- What we’re really talking about is values and beliefs. It’s the way you behave and what gets measured and what gets rewarded.
More business advice for business owners.
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o Death or moving away – 4%
o The influence of friends and relatives – 5%
o Competitor marketing and special offers – 9%
o Dissatisfaction with product or price – 14%
o Perceived indifference of the supplier – 68%
- A study by RightNow Technologies says
o 73% of customers leave because of poor customer service but the supplier thinks that only 21% leave because of customer service
o The supplier thinks 48% leave because of price when in fact only 25% do so
- Mercer Management Consulting research shows that for a selection of retail outlets, only 15% to 30% of customers are price sensitive – that is, they would change supplier for a better price
- So retaining customers is not (usually) about price – it’s about letting the customer know you care
So if you love your customers can you charge what you like?
- No. You have to be competitive in your market - but superior customer care and marketing mix (USP, positioning and so forth) means you get to keep most of your customers and still charge a premium
- Low prices won’t keep customers if they think you are indifferent to them. Worse, using low prices attracts disloyal customers. The worst strategy of all is using low prices to make up for the fact that you and your staff really don’t care
It’s really difficult and expensive to get all my staff to provide great customer service
- It might seem so to start with – but the rewards are huge
o According to a study by the global business consulting firm Baines a 5% increase in customer retention can increase a company’s profitability by 75%
o Reichheld and Sasser reported that when MBNA America reduced its 10% defection rate to 5% their profits rose by 125%
- What we’re really talking about is values and beliefs. It’s the way you behave and what gets measured and what gets rewarded.
More business advice for business owners.
How do you value your business?
Want to see videos of my seminars for business owners?
Monday 5 July 2010
Why do you need job description?
Why have job descriptions?
- Job descriptions are an essential part of co-ordinating and motivating employees
- Without a job description an employee does not have a clear understanding of what they are supposed to achieve and how their performance is measured – and you have no way to hold them accountable
- The process of creating and reviewing job descriptions is an opportunity to discuss and clarify the role – to reinforce two-way communication
What should be in a job description?
- Job Title
- The role that the position reports to (not the person)
- Main purpose of the role. One or two sentences that describe the main output of the job.
- Responsibilities
o The tasks and deliverables of the role - keep this to a maximum of six
o One sentence each
o Include only the permanent elements of the role – not transient targets or projects
o Be generic rather than specific: “Conform to current operations procedures “ rather than “Carry out procedures x, y and z”. Do not duplicate procedures or manuals.
- Dimensions
o The budget controlled
o Number of direct reports
o Regional or product boundaries
- Key challenges of the role
- Performance measures
o The key deliverables: “Performance against sales target” or “Customer satisfaction score”
o Keep this to a maximum of four
o Don’t include actual targets – these may change
- Required attributes
o Technical knowledge or skills
o Experience and qualifications
o Personal strengths: “Able to work on own initiative” or “Aptitude with technology”
Implementing job descriptions
- Use a standard template – or possibly two, one for management and one for other roles
- Where a new job description is required then get the post-holder to write it using the standard template (you still need to review and own it)
- Use generic job descriptions where you have more than one person doing the same job
- It gets more difficult to write a job description the more junior the role. It is difficult sometimes to identify performance measures for a clerical assistant. Nevertheless, if you are to develop a high-performance team then every employee needs to understand what they are supposed to be doing and how their performance will be measured
- Job descriptions should be no longer than one side of A4 - try these employment templates
More business advice for business owners.
How do I value my business?
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- Job descriptions are an essential part of co-ordinating and motivating employees
- Without a job description an employee does not have a clear understanding of what they are supposed to achieve and how their performance is measured – and you have no way to hold them accountable
- The process of creating and reviewing job descriptions is an opportunity to discuss and clarify the role – to reinforce two-way communication
What should be in a job description?
- Job Title
- The role that the position reports to (not the person)
- Main purpose of the role. One or two sentences that describe the main output of the job.
- Responsibilities
o The tasks and deliverables of the role - keep this to a maximum of six
o One sentence each
o Include only the permanent elements of the role – not transient targets or projects
o Be generic rather than specific: “Conform to current operations procedures “ rather than “Carry out procedures x, y and z”. Do not duplicate procedures or manuals.
- Dimensions
o The budget controlled
o Number of direct reports
o Regional or product boundaries
- Key challenges of the role
- Performance measures
o The key deliverables: “Performance against sales target” or “Customer satisfaction score”
o Keep this to a maximum of four
o Don’t include actual targets – these may change
- Required attributes
o Technical knowledge or skills
o Experience and qualifications
o Personal strengths: “Able to work on own initiative” or “Aptitude with technology”
Implementing job descriptions
- Use a standard template – or possibly two, one for management and one for other roles
- Where a new job description is required then get the post-holder to write it using the standard template (you still need to review and own it)
- Use generic job descriptions where you have more than one person doing the same job
- It gets more difficult to write a job description the more junior the role. It is difficult sometimes to identify performance measures for a clerical assistant. Nevertheless, if you are to develop a high-performance team then every employee needs to understand what they are supposed to be doing and how their performance will be measured
- Job descriptions should be no longer than one side of A4 - try these employment templates
More business advice for business owners.
How do I value my business?
Want to see videos giving business advice in Berkshire and Reading?
Tuesday 29 June 2010
Is business growth optional?
An acquaintance and business owner emailed me: "...I've never understood why business people are so obsessed with [growth], it just seems like an option to me...". He is not alone - a significant proportion of owner-managers with whom I work or who come to my business seminars are averse to growing their business. Often the reasons put forward are lifestyle choice, reluctance to employ more staff or fear that quality will suffer.
Now some of these are sole-traders or single consultants for which the term self-employed is more appropriate. The comments below refer to business owners, by which I mean people who employ and organise staff.
Here are my reasons, in no particular order, for suggesting that growth is necessary for an owner-managed business:
1. To be compelling for staff an organisation has to have a vision of something bigger than just the people involved. They want to be on a meaningful journey;
2. An organisation has to adapt, evolve and learn in order to survive in a changing environment. Whilst a smaller organisation may be more agile, often developing additional capabilities and skills requires new people and to do it well and consistently requires the size to cover the costs of developmental resources (that is, resources not completely utilised in production);
3. The bigger members of a species generally get the most food and their pick of mates. Business is an ecosystem and, all other things being equal, you will lose to your bigger competitors in the long run as they improve margins through economies of scale and spend more on marketing, product development and so forth;
4. There are economies of scale at all levels within an industry (so even small companies should operate more efficiently than their still smaller competitors);
5. Even if you have a unique advantage over your competition it is advisable to sell more, invest in developing that advantage and so exclude competition from that space - or risk losing the advantage. In this way a behaviour aimed at survival leads to growth;
6. Investment (whether angel, pension funds or bank loans) will follow the best returns. Whilst a private company does not have the exposure of a plc, in the long run growth means better returns and so easier access to funds. Even if a business owner is not seeking external funding, he or she takes the decision to invest more in their business every day. Rational behaviour is surely to seek increasingly good returns from that investment.
So growth may or may not be an end in itself but it is always a by-product for businesses that are fit to survive and in turn makes businesses more likely to survive. Business owners who decline to take on the very real challenges of making growth happen are not only unlikely to achieve the latent value in their business but also run the risk that they will not be one of the fittest that survive.
So...is business growth optional? Of course. So is learning to swim.
For more business advice for business owners go here
Want to know how much your company is worth (and why)? Go here
Now some of these are sole-traders or single consultants for which the term self-employed is more appropriate. The comments below refer to business owners, by which I mean people who employ and organise staff.
Here are my reasons, in no particular order, for suggesting that growth is necessary for an owner-managed business:
1. To be compelling for staff an organisation has to have a vision of something bigger than just the people involved. They want to be on a meaningful journey;
2. An organisation has to adapt, evolve and learn in order to survive in a changing environment. Whilst a smaller organisation may be more agile, often developing additional capabilities and skills requires new people and to do it well and consistently requires the size to cover the costs of developmental resources (that is, resources not completely utilised in production);
3. The bigger members of a species generally get the most food and their pick of mates. Business is an ecosystem and, all other things being equal, you will lose to your bigger competitors in the long run as they improve margins through economies of scale and spend more on marketing, product development and so forth;
4. There are economies of scale at all levels within an industry (so even small companies should operate more efficiently than their still smaller competitors);
5. Even if you have a unique advantage over your competition it is advisable to sell more, invest in developing that advantage and so exclude competition from that space - or risk losing the advantage. In this way a behaviour aimed at survival leads to growth;
6. Investment (whether angel, pension funds or bank loans) will follow the best returns. Whilst a private company does not have the exposure of a plc, in the long run growth means better returns and so easier access to funds. Even if a business owner is not seeking external funding, he or she takes the decision to invest more in their business every day. Rational behaviour is surely to seek increasingly good returns from that investment.
So growth may or may not be an end in itself but it is always a by-product for businesses that are fit to survive and in turn makes businesses more likely to survive. Business owners who decline to take on the very real challenges of making growth happen are not only unlikely to achieve the latent value in their business but also run the risk that they will not be one of the fittest that survive.
So...is business growth optional? Of course. So is learning to swim.
For more business advice for business owners go here
Want to know how much your company is worth (and why)? Go here
Monday 21 June 2010
Competitive Intelligence
What is competitive intelligence?
- In order to compete with and beat your competitors you need to know and understand them
- Large companies take a very methodical approach to this and may use specialist CI providers
- Lots of different pieces of information are put together to produce a picture of the competitors strengths, weaknesses, performance and intentions
- The principles can be simplified and used by small businesses
Why do you need competitive intelligence?
- To pick up new products and trends in your market
- To identify new markets
- To improve your understanding of what is important to your customers
- To adjust your proposition and positioning to make the most of relative strengths and weaknesses
- To take advantage of opportunities such as competitor failure
How do you gather competitive intelligence?
Online
o Their website
o Social media sites
o Newspapers
o Filings (Companies House)
o Job ads
o Press releases
Offline
o Their marketing materials, brochures, pricelists
o Trade shows
o Suppliers/partners/sub-contractors
o Their customers, your customer surveys
o Trade press
How should you do this in a small business?
- Keep a simple file of information you pick up about your key competitors
- Periodically, plan time to do a few hours research on them
- Periodically, plan time to review your proposition and positioning against this information using Competitor Analysis
- Adjust your proposition and look at the new opportunities suggested
For more business advice for business owners go here
Want to know how much your company is worth (and why)? Go here
PS Carli Adby, of Carli-Art Photography, attended my last seminar and "Really enjoyed your seminar so again, many thanks for the invite as I found it extremely useful..."
- In order to compete with and beat your competitors you need to know and understand them
- Large companies take a very methodical approach to this and may use specialist CI providers
- Lots of different pieces of information are put together to produce a picture of the competitors strengths, weaknesses, performance and intentions
- The principles can be simplified and used by small businesses
Why do you need competitive intelligence?
- To pick up new products and trends in your market
- To identify new markets
- To improve your understanding of what is important to your customers
- To adjust your proposition and positioning to make the most of relative strengths and weaknesses
- To take advantage of opportunities such as competitor failure
How do you gather competitive intelligence?
Online
o Their website
o Social media sites
o Newspapers
o Filings (Companies House)
o Job ads
o Press releases
Offline
o Their marketing materials, brochures, pricelists
o Trade shows
o Suppliers/partners/sub-contractors
o Their customers, your customer surveys
o Trade press
How should you do this in a small business?
- Keep a simple file of information you pick up about your key competitors
- Periodically, plan time to do a few hours research on them
- Periodically, plan time to review your proposition and positioning against this information using Competitor Analysis
- Adjust your proposition and look at the new opportunities suggested
For more business advice for business owners go here
Want to know how much your company is worth (and why)? Go here
PS Carli Adby, of Carli-Art Photography, attended my last seminar and "Really enjoyed your seminar so again, many thanks for the invite as I found it extremely useful..."
Tuesday 15 June 2010
Product Portfolio Analysis and Small Businesses
What is product portfolio analysis?
- This is a technique developed by the Boston Consulting Group to manage different products within a company's portfolio
- It was designed for large corporates but can be useful for smaller businesses too
It evaluates products or services by their market share against their market growth using the below matrix known as the "Boston Box"
Why are these two factors important?- A growing market means individual suppliers can grow with it without fighting for share and so putting pressure on margins
- A high market share means that prospects think of you first and so your sales cost less and growth is faster
- As a small business if you know your market size, growth and share already then you are probably in a niche and the BCG Box can be applied as shown
- Most small local businesses do not know the size of the markets for their products. It makes little sense (and is not practical) for, say, a small plumbing and heating business to try to measure their national market or even the regional one
The approach should be to refine and filter the markets actually or potentially addressed until you have arrived at market and product definitions which allow you to use the Boston grid. At this point you will have define a market niche that is useful and allows you to- Be a significant player in that market – or know that you need to be
- Have a clear marketing strategy, target and message
- Identify the products or services on which you should be concentrating your efforts
Refining and filtering the markets does not have to be complicated:- What geography can you serve well and profitably?
- What customer categories can you serve well and profitably?
- What specific products or services do you supply or do you want to supply?
- Would prospects in that market recognise the market as you define it?
- As an example, our plumber could refine one of his markets as "Manufacturers within 10 miles of x town" and one of his services as "Energy efficient boilers".
And in future....?
Virtual Goods: the next big business model - de - Der Internet- und Marketingblog: » Blog Archive » Blogshow 20. Virtual Relay Earns Real Money For Cancer Research | Tekjuice. XBox PS3 Wii Second Life and You : [chrisbrogan.
Monday 7 June 2010
Deciding a pricing strategy
Why have a pricing strategy?
- Pricing has a huge impact on your bottom-line. A slight increase in overall price can produce a large increase in net margin – while a slight decrease can mean you have to sell significantly more to make the same profit
- Without a pricing strategy providing sales discipline your margins may drift down
- General inflation (and in particular rises in your direct costs) will erode your margins over time even if you keep your prices steady
How do you decide on a pricing strategy?
- Increasing prices may drive down demand or reduce your conversion rate but whether it does this, and if so by how much, is a factor of your marketing and sales strategies
o Your choice of market and customer types
o Your positioning in that market
o Your proposition
o Your sales process
- If you get these right then your customers will be less sensitive to price and more focused on the benefits you provide
- Getting these right also means that even if you lose customers you increase gross margin overall (the increased margin more than makes up for reduced volume as shown in the example graph below)
What should you do?
- Find out where you are on the curve and adjust pricing to optimise overall margin
- Devise a marketing strategy that lifts the right-hand end of the demand line
Get more advice for business owners here
Try out a free tool for valuing your business here
See a video of one of my seminars here
- Pricing has a huge impact on your bottom-line. A slight increase in overall price can produce a large increase in net margin – while a slight decrease can mean you have to sell significantly more to make the same profit
- Without a pricing strategy providing sales discipline your margins may drift down
- General inflation (and in particular rises in your direct costs) will erode your margins over time even if you keep your prices steady
How do you decide on a pricing strategy?
- Increasing prices may drive down demand or reduce your conversion rate but whether it does this, and if so by how much, is a factor of your marketing and sales strategies
o Your choice of market and customer types
o Your positioning in that market
o Your proposition
o Your sales process
- If you get these right then your customers will be less sensitive to price and more focused on the benefits you provide
- Getting these right also means that even if you lose customers you increase gross margin overall (the increased margin more than makes up for reduced volume as shown in the example graph below)
- Those customers who are really price-sensitive are probably not your most profitable customers and you may be able to afford to lose them
- Remember that no customer ever says that the price is too low!What should you do?
- Find out where you are on the curve and adjust pricing to optimise overall margin
- Devise a marketing strategy that lifts the right-hand end of the demand line
Get more advice for business owners here
Try out a free tool for valuing your business here
See a video of one of my seminars here
Tuesday 1 June 2010
Delegation
Why delegate?
- Most business need more staff as they grow. Delegation is an essential technique for successfully distributing the tasks that you perform currently to these new staff
- One day your business will have to run (and continue to grow) without you. Even if this day is not in your plans yet, a resilient well-run business cannot rely upon one person
- Development and growth are great motivators for most people – so you should be actively seeking to increase the responsibility you give to your staff
- Your objective should be to delegate everything you do
How do you delegate successfully?
- Evaluate what you could or should delegate – start with the assumption that everything could be delegated if you really wanted to - and choose someone who could do the job with your support
- When you have chosen someone, make sure that they want to do it - clarify expectations
o Timescale
o Definition of success
o Level and limits of authority and responsibility
- Give them time to come up with their own plan to achieve this – and then agree it together
- Communicate the change and the reasons to all staff (and externally as necessary)
- If necessary provide time management or other training
- Once you have delegated, plan and carry-out regular reviews
o Provide guidance so they stay on track
o Share your experience
o Give praise and feedback – make sure they are learning
o DON’T take it back at the first sign of trouble
When not to delegate:
- When you don’t understand the problem
- When it’s too late
- Key tasks that amount to “ownership”, such as setting strategy, values and culture
What stops you delegating?
- Fear
- Lack of trust in others
- Insecurity about your own role, capabilities and knowledge
It’s about LEADERSHIP.
More stuff about leadership and management here
- Most business need more staff as they grow. Delegation is an essential technique for successfully distributing the tasks that you perform currently to these new staff
- One day your business will have to run (and continue to grow) without you. Even if this day is not in your plans yet, a resilient well-run business cannot rely upon one person
- Development and growth are great motivators for most people – so you should be actively seeking to increase the responsibility you give to your staff
- Your objective should be to delegate everything you do
How do you delegate successfully?
- Evaluate what you could or should delegate – start with the assumption that everything could be delegated if you really wanted to - and choose someone who could do the job with your support
- When you have chosen someone, make sure that they want to do it - clarify expectations
o Timescale
o Definition of success
o Level and limits of authority and responsibility
- Give them time to come up with their own plan to achieve this – and then agree it together
- Communicate the change and the reasons to all staff (and externally as necessary)
- If necessary provide time management or other training
- Once you have delegated, plan and carry-out regular reviews
o Provide guidance so they stay on track
o Share your experience
o Give praise and feedback – make sure they are learning
o DON’T take it back at the first sign of trouble
When not to delegate:
- When you don’t understand the problem
- When it’s too late
- Key tasks that amount to “ownership”, such as setting strategy, values and culture
What stops you delegating?
- Fear
- Lack of trust in others
- Insecurity about your own role, capabilities and knowledge
It’s about LEADERSHIP.
More stuff about leadership and management here
Wednesday 26 May 2010
Features v benefits
We struggled a little with this at my last workshop so...
What are features and benefits?
- A feature is some distinguishing attribute of a product or service, such as ruggedness, speed, range of stock, payment options
- A benefit is the use or benefit of that feature from the customer’s perspective
- Your marketing and sales should focus on benefits, not features
How do you identify the relevant features and benefits?
- You start by identifying the relevant benefits from the customer’s point of view and then identify the attributes of your product or service that provide those benefits
- If you start with the features and then try to find benefits to match you may not end up with a compelling customer proposition
- A solid product development process starts with the benefits the customer seeks and creates a product with the required features
- Most businesses are the result of a long line of similar businesses and so the product development process here is evolution – but you still need to understand and articulate the benefits to the customer
- Sometimes customers don’t know that they will value the benefits of a particular feature – think SMS messaging or post-it notes – but the benefit is still what sells it
How do you separate and explain features and benefits?
- Use the phrase “...and that means...” as in
o “Product x is lighter than product y AND THAT MEANS you can get it into your carry-on luggage”. Here the benefit is not having to queue at the luggage carousel in arrivals
- Think about the outcome for the customer, not the actual thing you are selling them
o Product x has a 10-year guarantee AND THAT MEANS that you won’t have to worry about replacing it
o We carry all the leading brands AND THAT MEANS that you can be sure that you will find what you need and won’t have a wasted journey
o Service x is available at a time to suit you AND THAT MEANS you won’t have to take time off work to see us.
More straightforward advice here
What are features and benefits?
- A feature is some distinguishing attribute of a product or service, such as ruggedness, speed, range of stock, payment options
- A benefit is the use or benefit of that feature from the customer’s perspective
- Your marketing and sales should focus on benefits, not features
How do you identify the relevant features and benefits?
- You start by identifying the relevant benefits from the customer’s point of view and then identify the attributes of your product or service that provide those benefits
- If you start with the features and then try to find benefits to match you may not end up with a compelling customer proposition
- A solid product development process starts with the benefits the customer seeks and creates a product with the required features
- Most businesses are the result of a long line of similar businesses and so the product development process here is evolution – but you still need to understand and articulate the benefits to the customer
- Sometimes customers don’t know that they will value the benefits of a particular feature – think SMS messaging or post-it notes – but the benefit is still what sells it
How do you separate and explain features and benefits?
- Use the phrase “...and that means...” as in
o “Product x is lighter than product y AND THAT MEANS you can get it into your carry-on luggage”. Here the benefit is not having to queue at the luggage carousel in arrivals
- Think about the outcome for the customer, not the actual thing you are selling them
o Product x has a 10-year guarantee AND THAT MEANS that you won’t have to worry about replacing it
o We carry all the leading brands AND THAT MEANS that you can be sure that you will find what you need and won’t have a wasted journey
o Service x is available at a time to suit you AND THAT MEANS you won’t have to take time off work to see us.
More straightforward advice here
Thursday 20 May 2010
Customer categories
- Too many companies define their target market too broadly – “consumers” is a common description, as is “SMEs” or even (slightly better) “the construction industry”
- You need to divide that market down further into particular types of customer, for example
o “Owner-managed businesses in the RG postcode with between 5 and 50 employees” or
o “Builders on the local council suppliers list who do not have an internal H&S manager” or
o “Women between 25 and 35 who are fashion-conscious but on a budget.”
- It helps to give them a name – for instance a supermarket chain might categorise some of its customers as “Northern Brand Loyalists” and others as “Sausage-and-mashers”
- A customer category is another way of describing a market niche
Why have customer categories?
- It will help you make decisions about which customers you want – and which you don’t want
o Which customers are more profitable – and which are a nightmare to deal with?
- It will help you understand why those customers choose your product or service – or that of your competitor
o Which benefits are more important to them – and which less?
o How well do you match those desires – and how do you compare with the competition?
- It will help you develop propositions which are tuned to the customers’ requirements – even if the base product or service is the same
- It will help you quickly and easily communicate the type of customer you are looking for
- You should strive to be number 1 or 2 in your market. If you are not big enough to achieve this in the whole market you can focus on a niche (a customer category) where you can be number 1 or 2 and so dominate.
How do you identify customer categories?
- Think through the benefits that your customers are seeking – what is important to them and how does it differ for different customers?
- Think about the different ways they buy – where, when, how often?
- Think about different attributes – age, sex, where they live
- Think about the different things your product or service does for different customers
o What need does it fulfil?
o What does it allow them to deliver to their customers?
o What barriers does it remove?
o How many different uses is it put to?
o Ask them!
- Take the differences that you find most useful and group them into customer categories.
See more advice for business owneres here
See what your business is worth here
- You need to divide that market down further into particular types of customer, for example
o “Owner-managed businesses in the RG postcode with between 5 and 50 employees” or
o “Builders on the local council suppliers list who do not have an internal H&S manager” or
o “Women between 25 and 35 who are fashion-conscious but on a budget.”
- It helps to give them a name – for instance a supermarket chain might categorise some of its customers as “Northern Brand Loyalists” and others as “Sausage-and-mashers”
- A customer category is another way of describing a market niche
Why have customer categories?
- It will help you make decisions about which customers you want – and which you don’t want
o Which customers are more profitable – and which are a nightmare to deal with?
- It will help you understand why those customers choose your product or service – or that of your competitor
o Which benefits are more important to them – and which less?
o How well do you match those desires – and how do you compare with the competition?
- It will help you develop propositions which are tuned to the customers’ requirements – even if the base product or service is the same
- It will help you quickly and easily communicate the type of customer you are looking for
- You should strive to be number 1 or 2 in your market. If you are not big enough to achieve this in the whole market you can focus on a niche (a customer category) where you can be number 1 or 2 and so dominate.
How do you identify customer categories?
- Think through the benefits that your customers are seeking – what is important to them and how does it differ for different customers?
- Think about the different ways they buy – where, when, how often?
- Think about different attributes – age, sex, where they live
- Think about the different things your product or service does for different customers
o What need does it fulfil?
o What does it allow them to deliver to their customers?
o What barriers does it remove?
o How many different uses is it put to?
o Ask them!
- Take the differences that you find most useful and group them into customer categories.
See more advice for business owneres here
See what your business is worth here
Wednesday 12 May 2010
How much is my business worth?
Even if you don’t plan to sell your business in the near future it’s important that you understand how your business would be valued by a prospective purchaser:
If you want a more specific and detailed valuation with a view to selling soon I recommend you try Plan B Associates
They offer those thinking about selling their business a free, no obligation consultation aimed at answering the initial key questions most owners have – Is it the right time for me to sell? How much is my business worth? How do I find the right buyer? How long will it take to complete a deal? What service does a broker provide? Is using one right for me?
You can email them on info@planbassociates.co.uk or call 01483 440781
- The things that make a business valuable to someone else will make it more controllable, profitable and scalable for you
- Getting a business ready to sell takes years – if you just wake up and decide to sell it you will probably not get what it could be worth. If you know what buyers are looking for then you can start working on those things right now
Assets
Fixed assets like machinery or buildings, current assets like stock and money owing from customers, and amounts owing to the bank (and you)
Cash flow
- Often buyers will use a rule of thumb such as a multiple of turnover or profit to arrive at an initial price. This is simple and is based on a typical business in your industryThis multiple is a way of estimating the actual cash that the business will deliver based on industry norms for margins, stock, debtor and creditor levels and the quality of earnings (see below). However, if your business isn’t very good at turning turnover into profit into cash then the value (and your current lifestyle) will sufferThere will be adjustments for paying someone to replace you and also any expenses you put through the books
- Not all future profit (or cash flow) is the same. The more uncertain it is that current levels will continue into the future, the lower the selling priceIf your income is mainly from projects then there is a high risk that this will not continue indefinitely – or at least, that cash flows will be volatileIf your income is mainly from repeat work or maintenance then this will be seen as more stable and certain and so lower riskIf your income is mainly from long-term contracts then this is the lowest risk of all and the buyer can be confident that it will continue at current levelsIf a large proportion of income comes from a small number of customers then this is also a risk
- If a significant part of the work is done by you, or if key processes rely upon you, then this will seriously reduce the value of your business to a buyer
- If processes are not documented and systemised so that the business can be operated by and with anyone with the appropriate skills then this will reduce the value
- If you can’t go on holiday for 3 months and come back to a working business then it’s probably not worth much to anyone else
- A buyer will not pay for improvements or efficiencies that she herself will have to implement after the sale
- A buyer will not pay for unsubstantiated growth forecasts!
If you want a more specific and detailed valuation with a view to selling soon I recommend you try Plan B Associates
They offer those thinking about selling their business a free, no obligation consultation aimed at answering the initial key questions most owners have – Is it the right time for me to sell? How much is my business worth? How do I find the right buyer? How long will it take to complete a deal? What service does a broker provide? Is using one right for me?
You can email them on info@planbassociates.co.uk or call 01483 440781
Sunday 2 May 2010
Recruitment interviews
Selecting people is just about the most important thing a business owner or manager does. It should not be left to chance – interviews should be planned.
Preparation
- Prepare or review the job description. This should describe the main tasks to be performed, the desired outputs or results and how this will be measured. It should list the technical knowledge or skills, level of experience and personal attributes required to be successful in the role.
- Prepare a marking scheme for candidates. This should list the requirements of the role and have spaces for positive evidence, negative evidence and a score against each.
- Prepare a structured interview. This is a series of questions designed to establish positive or negative evidence against each of the required attributes. These should be open questions which encourage the candidate to talk, rather than closed questions leading to a simple “Yes” or “No”. The questions should be layered so that you can drill down and get evidence of the previous experience or attitude if this is not volunteered.
- For certain roles you may need to deploy additional selection tests, such as role play, a presentation, psychometric tests or skills tests.
- Prepare a briefing pack for the candidates. This should include the job description, history of the organisation, organisation chart, any mission or value statements you have and so forth. Don’t forget that you are trying to sell the role to them and that good candidates will have a choice. Make sure that reception knows who to expect and how to welcome candidates.
The Interview
- Have more than one interviewer. The panel should include the person who will be the direct supervisor of the new employee and someone with good technical knowledge of the area concerned. Agree who will lead the interview.
- Set aside sufficient time (60-90 minutes) and make sure that there are no interruptions. There is nothing more important than hiring the right people.
- Make introductions and explain why people are there. Set the scene – company background, mission, values. Why the vacancy has arisen and key challenges/expectations for the role. Explain that you are following a structured process so that you will sometimes have to move the interview on.
- Follow the structured interview and stick to the time allowed. Listen actively to responses, encourage the candidate to open up but keep things focused and relevant. Cover all the questions and get evidence for all answers.
- Allow time for their questions at the end.
Post-interview
- Complete your notes and scoring immediately and compare with the other interviewers to reach a consensus.
- Take up all references and check all qualifications.
- Decide and appoint quickly – good candidates will have other options
Click here for more business advice
Preparation
- Prepare or review the job description. This should describe the main tasks to be performed, the desired outputs or results and how this will be measured. It should list the technical knowledge or skills, level of experience and personal attributes required to be successful in the role.
- Prepare a marking scheme for candidates. This should list the requirements of the role and have spaces for positive evidence, negative evidence and a score against each.
- Prepare a structured interview. This is a series of questions designed to establish positive or negative evidence against each of the required attributes. These should be open questions which encourage the candidate to talk, rather than closed questions leading to a simple “Yes” or “No”. The questions should be layered so that you can drill down and get evidence of the previous experience or attitude if this is not volunteered.
- For certain roles you may need to deploy additional selection tests, such as role play, a presentation, psychometric tests or skills tests.
- Prepare a briefing pack for the candidates. This should include the job description, history of the organisation, organisation chart, any mission or value statements you have and so forth. Don’t forget that you are trying to sell the role to them and that good candidates will have a choice. Make sure that reception knows who to expect and how to welcome candidates.
The Interview
- Have more than one interviewer. The panel should include the person who will be the direct supervisor of the new employee and someone with good technical knowledge of the area concerned. Agree who will lead the interview.
- Set aside sufficient time (60-90 minutes) and make sure that there are no interruptions. There is nothing more important than hiring the right people.
- Make introductions and explain why people are there. Set the scene – company background, mission, values. Why the vacancy has arisen and key challenges/expectations for the role. Explain that you are following a structured process so that you will sometimes have to move the interview on.
- Follow the structured interview and stick to the time allowed. Listen actively to responses, encourage the candidate to open up but keep things focused and relevant. Cover all the questions and get evidence for all answers.
- Allow time for their questions at the end.
Post-interview
- Complete your notes and scoring immediately and compare with the other interviewers to reach a consensus.
- Take up all references and check all qualifications.
- Decide and appoint quickly – good candidates will have other options
Click here for more business advice
Saturday 24 April 2010
What's troubling your staff right now?
Clive Pugh and Nick Forgham have just carried out a telephone survey of the main staff issues that business owners and business professionals were experiencing in the current economic climate.
They talked to 20 individuals, making a note of the words and phrases they used and then scoring the frequency. Although this is only a small sample the results make interesting reading.
From the responses a Top 10 of staff issues was compiled as below. Some grouping of issues under a single word heading was carried out. For example “focus” was interpreted as an alternative word used for “motivation”, and “commitment” and “buy-in” were taken to be part of the broader word “engagement”.
Many of the issues would appear to overlap in particular the categories of overwork and stress; though the latter was only scored when the exact word was used.
The balance of frequency of staff issues put forward by business owners and professionals was very heavily weighted to the ones at top of the list with 83% of responses covered by the top 6 and 33% by the top two alone.
The list is open to a great deal of interpretation as it only shows the words or phrases actually expressed. The respondents were not prompted in anyway, so although issues such as Wellbeing/Health and Absenteeism had a low score those issues may well be present though perhaps less evident and not so immediately impactful.
The Top 10 issues are:
1. Motivation
2. Engagement
3. Job Security
4. Overwork
5. Performance
6. Communication
7. Stress
8. Wellbeing/Health
9. Staff Retention
10. Absenteeism
Clive Pugh of Clive Pugh Career Coaching http://www.clivepughcareercoaching.co.uk/ 0118 966 2530 or 07967 309568
Nick Forgham of Have a Healthy Life http://www.haveahealthylife.com/ 0118 966 0274 or 07776 258366
They talked to 20 individuals, making a note of the words and phrases they used and then scoring the frequency. Although this is only a small sample the results make interesting reading.
From the responses a Top 10 of staff issues was compiled as below. Some grouping of issues under a single word heading was carried out. For example “focus” was interpreted as an alternative word used for “motivation”, and “commitment” and “buy-in” were taken to be part of the broader word “engagement”.
Many of the issues would appear to overlap in particular the categories of overwork and stress; though the latter was only scored when the exact word was used.
The balance of frequency of staff issues put forward by business owners and professionals was very heavily weighted to the ones at top of the list with 83% of responses covered by the top 6 and 33% by the top two alone.
The list is open to a great deal of interpretation as it only shows the words or phrases actually expressed. The respondents were not prompted in anyway, so although issues such as Wellbeing/Health and Absenteeism had a low score those issues may well be present though perhaps less evident and not so immediately impactful.
The Top 10 issues are:
1. Motivation
2. Engagement
3. Job Security
4. Overwork
5. Performance
6. Communication
7. Stress
8. Wellbeing/Health
9. Staff Retention
10. Absenteeism
Clive Pugh of Clive Pugh Career Coaching http://www.clivepughcareercoaching.co.uk/ 0118 966 2530 or 07967 309568
Nick Forgham of Have a Healthy Life http://www.haveahealthylife.com/ 0118 966 0274 or 07776 258366
Saturday 17 April 2010
Small business innovation
Innovation may not be critical in your industry (yet). And it's not just something you can "do". But – you should be looking at your business to see how you can make it more likely that innovation happens...
• Innovative ideas are not born in a moment of inspiration; they are the result of lots of thinking, trial and error over a long period. You need to put the necessary environment in place. If you can, hire people who are bright and challenge convention. If staff demonstrate that they are thinking of different ways of doing things – encourage and praise them. Recognise and reward ideas (even if they aren’t useful);
• Most innovations are the result of errors, failed experiments, crises and copy errors – in short, evolution. Show your staff that learning from crisis or failure is valuable when it is used to improve the way things are done. Don’t punish failure which results from appropriate risk-taking. Make post-event evaluation and learning second-nature to your staff;
• There is a time and a place to innovate. This probably isn’t when backing up your main servers or running your payroll. Separate and tightly control high risk, high importance activities;
• You can’t set up a system to guarantee innovative ideas. But you can demonstrate what innovative behaviour looks like and how it will be rewarded;
• Almost everyone in your organisation will resist new ways. Make it easy for new ideas to reach you;
• The best ideas come from groups – people build on and encourage each other’s insights. Encourage open discussion of issues and communication across teams – don’t pigeon-hole people;
• There will be loads of ideas in your organisation. You just need to talk to people. Ask them what they would do differently, or what customers would really like;
• You don’t know best. Make sure you don’t reject ideas without discussion or make people afraid to suggest new ways. Don’t let your fear stifle your employees’ imagination;
• A better mousetrap doesn’t always win. There are loads of examples of inferior products succeeding –how about Windows for a start? Don’t let the search for perfection kill a flawed but pretty neat idea that you can sell today;
• Innovation has to serve a need. Despite all the points above, just being new is not sufficient. There has to be a problem which the innovation addresses (even if, like fear of BO and deodorant, you have to create the problem through marketing first);
• An innovation may be a Bad Thing. Just look at Big Brother, shell suits and speed cameras.
Based on ‘The Myths of Innovation’ by Scott Berkun as interpreted by Yann Gourvanec
More stuff:
• Innovative ideas are not born in a moment of inspiration; they are the result of lots of thinking, trial and error over a long period. You need to put the necessary environment in place. If you can, hire people who are bright and challenge convention. If staff demonstrate that they are thinking of different ways of doing things – encourage and praise them. Recognise and reward ideas (even if they aren’t useful);
• Most innovations are the result of errors, failed experiments, crises and copy errors – in short, evolution. Show your staff that learning from crisis or failure is valuable when it is used to improve the way things are done. Don’t punish failure which results from appropriate risk-taking. Make post-event evaluation and learning second-nature to your staff;
• There is a time and a place to innovate. This probably isn’t when backing up your main servers or running your payroll. Separate and tightly control high risk, high importance activities;
• You can’t set up a system to guarantee innovative ideas. But you can demonstrate what innovative behaviour looks like and how it will be rewarded;
• Almost everyone in your organisation will resist new ways. Make it easy for new ideas to reach you;
• The best ideas come from groups – people build on and encourage each other’s insights. Encourage open discussion of issues and communication across teams – don’t pigeon-hole people;
• There will be loads of ideas in your organisation. You just need to talk to people. Ask them what they would do differently, or what customers would really like;
• You don’t know best. Make sure you don’t reject ideas without discussion or make people afraid to suggest new ways. Don’t let your fear stifle your employees’ imagination;
• A better mousetrap doesn’t always win. There are loads of examples of inferior products succeeding –how about Windows for a start? Don’t let the search for perfection kill a flawed but pretty neat idea that you can sell today;
• Innovation has to serve a need. Despite all the points above, just being new is not sufficient. There has to be a problem which the innovation addresses (even if, like fear of BO and deodorant, you have to create the problem through marketing first);
• An innovation may be a Bad Thing. Just look at Big Brother, shell suits and speed cameras.
Based on ‘The Myths of Innovation’ by Scott Berkun as interpreted by Yann Gourvanec
More stuff:
Small Business News: Operation Innovation | Small Business Trends - With the economy still in a volatile state and the future in doubt, the only certainty is uncertainty. The possibility remains for more troubles to come.
Tuesday 6 April 2010
How much is your business worth?
As a business owner, you should be starting with the end in mind, and the end must be maximizing the value of your business when you pass the reins on. Whatever your goals (and if you have them clear in your mind and written down you're in the minority), understanding how you make your business more valuable will be key to achieving them.
I'm not talking about selling up right now. In any case, unless you are an exceptional owner running an exceptional business, you need to aim off by at least three years to get things into a state where you can sell and get value. I'm not even talking about selling ever - you might want to hand it on to the next generation. I'm talking about understanding what increases the value of your business to others - and then managing those things. The reason is simple; the things that make your business valuable to someone else make it manageable, resilient, growing and profitable for you.
The factors you need to consider are not just financial (although those are pretty important, of course). You'll also need to understand and address the vision, market positioning, processes, quality of revenue - and your own role now and in the future.
If you are a business owner and you want to learn a bit more about these things then you might like to come along to this free seminar - you'll learn something and you'll get a free breakfast as well.
I'm not talking about selling up right now. In any case, unless you are an exceptional owner running an exceptional business, you need to aim off by at least three years to get things into a state where you can sell and get value. I'm not even talking about selling ever - you might want to hand it on to the next generation. I'm talking about understanding what increases the value of your business to others - and then managing those things. The reason is simple; the things that make your business valuable to someone else make it manageable, resilient, growing and profitable for you.
The factors you need to consider are not just financial (although those are pretty important, of course). You'll also need to understand and address the vision, market positioning, processes, quality of revenue - and your own role now and in the future.
If you are a business owner and you want to learn a bit more about these things then you might like to come along to this free seminar - you'll learn something and you'll get a free breakfast as well.
Monday 29 March 2010
Bonus schemes
If you're going to incentivise your employees - be careful! Think it through and make sure that a) the rewards incentivise the behaviour you want and b) that you can afford all possible outcomes. The maximum bonus should be enough to recognise over-performance but restricted in terms of total earnings - a maximum of 50% of basic salary. Here are some guidelines:
1. Tie individual bonuses to overall company performance ie an overall profitability hurdle must be achieved before individual departmental performance related pay kicks in. (Downside is the fact that good performers don’t get what they might deserve but at least it avoids the situation where you can’t afford to pay – and it means under-performance gets attention sooner);
2. Bonus payments must be self-funding; that is; they must be more than covered by the improved profit delivered by the bonusable over-achievement. If the company derives no benefit from the over-achievement then why incentivise its achievement? Obviously base and bonus targets must match the business plan and budget;
3. By definition then, bonus payments must be linked to profit not turnover;
4. They should be capped – and they should be discretionary;
5. You might want to think about adding other desirable outcomes to the target. For instance, let’s say you have a problem with roles & responsibilities. You could make “100% of department having a job description and appraisal that year” a bonus hurdle. I’m sure you could think of other items.
Nick Bettes
1. Tie individual bonuses to overall company performance ie an overall profitability hurdle must be achieved before individual departmental performance related pay kicks in. (Downside is the fact that good performers don’t get what they might deserve but at least it avoids the situation where you can’t afford to pay – and it means under-performance gets attention sooner);
2. Bonus payments must be self-funding; that is; they must be more than covered by the improved profit delivered by the bonusable over-achievement. If the company derives no benefit from the over-achievement then why incentivise its achievement? Obviously base and bonus targets must match the business plan and budget;
3. By definition then, bonus payments must be linked to profit not turnover;
4. They should be capped – and they should be discretionary;
5. You might want to think about adding other desirable outcomes to the target. For instance, let’s say you have a problem with roles & responsibilities. You could make “100% of department having a job description and appraisal that year” a bonus hurdle. I’m sure you could think of other items.
Nick Bettes
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