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Starting a New Business: Part 2 – Are you ready?

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Last time we talked briefly about things to consider in the early going of the business you just started.

We talked a little about the product/service, but focused mostly on some basics about licenses/permits and getting supplies with a little taste of business model talk.

The reality is that we shouldn’t have talked about most of that stuff, but we had to start with that conversation because it’s the type of thing new business owners expect to hear.

You might be thinking “I’ve already got a product, I’ve already got a business (even if it’s only a few days old) and I need to know what to do to start. NOW. RIGHT NOW. So help, already…”

Problem is, that’s not the best place to start if you want to build something lasting.

Fake left, go right

Sorry for rushing ahead last time, but I wanted to get you into analysis mode just a little bit before we moved ahead (or back) to this step.

We did talk briefly about the business model and I hope that provoked you a little. Ideally, it made you think that you might not have all the info you need to work out the details of your model. Those of you who thought hard about it probably wondered if you didn’t have a lot more work to do.

You do.

Before you order those business cards, buy those supplies, determine your costs and set your prices…you need to research your market.

This means far more than doing a keyword check to see how many Google searches there are for “gold plated harmonica” (if that’s your business), much less finding out if GoldPlatedHarmonica.com is available and at what level the competition is already delivering these items. Those things are just part of the process.

Questions, questions

How much do you really know about the market you’re entering? Assuming the market isn’t brand new, have you researched industry product, service, supply and performance trends? What do they indicate as areas of opportunity? Areas to avoid? What are the emerging product/service trends in this market?

Are you familiar enough with your prospective ideal customer to enter their market? Or will you stand out in the wrong way and alienate your business from them?

Who buys gold plated harmonicas? Where do they live? What kind of stores do they purchase music supplies in? What else do they buy at the same time? How many are sold per year? Where are they purchased – online, in stores or both? How many are purchased annually? Are their peaks and valleys in purchasing habits? Are there peaks and valleys in supply? Are there legislative, import or similar issues that you must deal with at startup or on a one-time basis? Are there any liability concerns for the product and its use?

How many do they buy over their lifetime as a purchaser of gold-plated harmonicas? Is there a progression of better and better purchases? Is there the possibility of referrals by your existing customers to others who favor gold-plated harmonicas? Are there opportunities to render service, deliver purchases or offer training classes?

At what age do people start upgrading to gold-plated harmonicas? At what age do they stop purchasing? How do people decide to be in the market for gold-plated harmonicas? What do they buy in the year or two prior to moving up to a gold-plated one? Where can you buy replacement parts? Is there a repair market or do people replace them? Is there a scrap market? (they are gold-plated, after all)

Who dominates the market today? Why do they dominate the market? What will you do to set yourself apart from them? Is it possible to partner with them?

These questions come into play when writing a marketing plan but many of them also have bearing on your business model / business plan.

Are you asking enough of the right questions? Are you doing the research necessary to assure that your business plan / model make sense given the market of available buyers?

These questions are not intended to scare you out of a market. Quite the contrary, they are intended to make your entry strong enough to keep you there.

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Business model Competition Creativity Improvement Leadership planning Positioning Small Business Software business strategic planning

What would happen if yours was perfect?

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If your software business was â??perfectâ?, what would it look like?

What do I mean? Here are a few ideas to get you startedâ?¦

  • Whatâ??s your product line look like?
  • What services do you offer?
  • How big (or little) is your staff?
  • What benefits do you offer?
  • How much vacation do you enjoy per year?
  • What would your customers say about your company?
  • How many customers would you have?
  • What trade shows do you exhibit at?
  • Whatâ??s your position in the market?
  • What would happen when a support call came in?
  • What would happen when a bug was found?

Not in the software business? So what. Replace “software business” with whatever you do. Alter the question list to fit your business.

You might be thinking none of this could ever happen.

Or you could start with your answers and work backwards to figure out what it will take to get there. Take one step, then another.

If you don’t ask yourself the hard questions…who will?

PS: Are you really in the <whatever> business? A drill bit manufacturer doesn’t sell drill bits. Ultimately, they sell holes. A coffee shop sells comfort, even to take out customers. What do you really sell?

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attitude Business culture Competition Marketing planning Retail Sales Small Business strategic planning Time management Trade Shows

Put away the white shoes

seoul conductor
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Back in my grandmother’s day, the day after Labor Day meant “Put away the white shoes.”

These days, we may not be quite so beholden to old school wardrobe rules, but we still tend to let a Roman emperor’s calendar decide when our business is going to take action.

With the exception of consumer retailers, some businesses are trying to wrap up their revenue goals before hunting season, before the holidays and so on.

Likewise, many will wait until “everyone is back” (from what, exactly?) in mid-January to ramp up next year’s business. Many of those haven’t even planned what they’ll be doing in the new year.

If you do trade shows, you already know you can’t do this. You have to have your booth setups, marketing materials, products and a litany of other things organized months in advance. You actually have to have your act together, at least as the show requires. You have to show up ready to deliver.

Whether you do trade shows or not, have you started planning what you’re going to get done next year and how you’re going to launch it?

The rest of the year will likely take care of itself. You should already have it planned. Execution should already be in motion. If you don’t even have that planned, maybe it’s time to start your new year right now.

What’s the point of waiting?

Show up for the rest of the year…ready to deliver.

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Raise The Bar!

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During some recent travel to deal with some family stuff, I’ve had a chance to see how business is going elsewhere in the U.S.

One thing caught my eye over the weekend and I think it merits some discussion.

It illustrates how much room there is for a coherent, attentive business in the marketplace…even in today’s economy.

Billboards

If I look, did it work? Nevermind, that was a few weeks ago…

Seriously, I saw a billboard that stated a HVAC (heating, ventilation and air conditioning) company’s unique sales position (USP) and / or differentiating factor.

It was “We’ll be on time.”

If they aren’t on time, the service is free.

They didn’t advertise the quality of their service or the highly trained nature of their service people.

They simply said “Unlike everyone else, we’ll be on time and if we aren’t, our work will be free.”

One of the biggest time-wasters foisted upon consumers these days is the “We’ll be there between 8 and 5 or noon and 5” etc. People are unwilling to commit an entire day to deal with your inability to manage your work schedule, but they have no choice in many cases.

This HVAC company has a much smaller window of “we’ll be there”, but they’ve decided to accept responsibility when they mismanage their time.

I think it’s an effective sales tool that speaks directly to consumers’ pet peeves, but it begs the question “How much lower can businesses lower the bar?”

Are you lowering the bar or raising it? Which benefits you and frustrates your competition? Which makes it easier for consumers to choose you?

What are you doing that your competition is unable or unwilling to do? Are you leading your market or simply showing up?

Raise the bar.

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attitude Automation Business culture Competition Creativity Disney E-myth Employees Entrepreneurs Improvement Leadership Management Personal development planning Productivity quality Small Business strategic planning systems Time management

Working in Disneyland. Not.

PING PONG
Creative Commons License photo credit: Max Braun

A few weeks ago, we talked about the importance of strategic delegation and how it might just enable you to enjoy a phone call free vacation, much less free up some hugely important strategic thinking time.

When I was in the photography software business, I quickly learned that photographers absolutely detest being pulled out of the camera room to answer the phone.

Likewise, if I emailed them about something urgent (usually because they said it was urgent), theyâ??d often respond hours later saying that they had been in the camera room and hadnâ??t seen my email.

It’s not as if they were hiding from us. Usually we were trying to contact them to help them resolve a problem, train them or answer a question.

But you don’t pull them out of the camera room.

It’s not Disneyland

The camera room isnâ??t a magical place, but it is where they make their money. Itâ??s where the backgrounds, props, lights and cameras are. Itâ??s where their clients are when they are creating their masterpiece, which results in revenue. They DO NOT like being interrupted while they are in there, just in case I wasn’t clear.

Technical jobs (programming, engineering, etc) work the same way. While performing detailed, highly-technical work; these workers despise being interrupted. We get into the zone, into a flow, we get clear, whatever you call it.

Interrupting us from this work after immersing ourselves in it is expensive and annoying. It takes a while (15-20 minutes or more) to get back to the zone where we can be productive with all the right stuff in our head.

And then the door to your office opens because someone wants to know where the toilet paper is or what place we have planned for lunch.

In an instant, youâ??re out of the zone. Even if you aren’t “technical”.

Produce a Procedures Manual

One thing that helps reduce these interruptions is having a procedures manual. Just because itâ??s called a manual doesnâ??t mean it has to be printed. It might be a wiki or a really long MS Word document. It doesnâ??t matter as long as it is documented and accessible by anyone who needs to perform a task at your business.

This manual might prevent you from getting a call on a Sunday afternoon at dinner time because someone went into the office to plan their week (or pick up something they forgot), and realized that they donâ??t know how to turn on the alarm.

Or the alarm is going off and the police are there and they want to know how to turn it off, so they call you while you’re in the doctor’s office, on the beach, etc. Worse yet is when they can’t reach you, so they leave without turning the alarm on, or similarly less-than-ideal situations.

Important Safety Tip

There is no process that must be done regularly in your business that is too trivial to leave out of this documentation.

Yes, I said no process too trivial.

One reason I suggest that is that someday you will have a new employee. They will start at the bottom. They won’t know anything.

And they’ll pull you out of the camera room (or your equivalent) every five minutes to ask you about this or that if you don’t have anything else (like a procedures manual) to provide this instruction.

Certainly there will be enough face to face contact as it is. In the old consultant’s home, you’ll hear us muttering something along the lines of “What’s worse than spending the time and effort to train an employee who stays for years? NOT training them and having them stay for years.”

I know you’ll train them. Really I do. Still, there are things that simply shouldn’t require hands-on training. They might be performed by a temporary employee.

These tasks will often be mundane, ranging from opening the store, to packaging to closing the store at the end of the day to turning off the alarm when set off by mistake.

Each is one less “really good reason” to pull you (or someone else) out of the zone.

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Business model Creativity Entrepreneurs Leadership planning Small Business strategic planning

Transparency. Real transparency.

Hildy and Dimitri’s efforts have always been pretty transparent.

But a few months ago, they made a big decision to basically reboot their entire business.

Many business owners have done that. But not like this.

Instead of doing it all in the cones of silence, they decided that every step of the way, they would make this transition in full view of their friends, family, competition, clients, prospects and anyone else willing to look.

It’s much more interesting than anything Charlie Sheen’s doing.

But the discussion there really isn’t why I mention this. Sure, it’s instructive because they listen as well as anyone I’ve ever worked with.

That’s not the takeaway. What you should take away from the process they’re going through is the idea of being willing to completely redesign your business – even if it doesn’t need it right this minute.

I suspect there are some in the nuclear energy business who are mulling that over right now.

You don’t have to do it in full view of the public like Hildy and Dimitri have, but everyone ought to do it once in a while.

Like Harvey Mackay says, “Dig the well before you’re thirsty.”

 

 

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attitude Competition Creativity Employees Entrepreneurs goals Ideas Improvement Leadership planning Small Business strategic planning

Don’t Listen to these Creativity Killers

Green Elephants Garden Sculptures
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I‘ve been reading John Maxwell’s “How Successful People Think” recently.

This list of creativity killing comments from John’s book reminded me of so many things going on in the world these days that I simply had to make it a guest post.

How many times have you heard these comments when you shared an idea?

  • Follow the rules.
  • Don’t ask questions.
  • Don’t be different.
  • Stay within the lines.
  • There is only one way.
  • Don’t be foolish.
  • Be practical.
  • Be serious.
  • Think of your image.
  • That’s not logical.
  • It’s not practical.
  • It’s never been done.
  • It can’t be done.
  • It didn’t work for them.
  • We tried that before.
  • It’s too much work.
  • We can’t afford to make a mistake.
  • It will be too hard to administer.
  • We don’t have the time.
  • We don’t have the money.
  • Yes, but …
  • Failure is final.

While some of them might be worth a discussion somewhere down the road, they’re guaranteed to kill creative thought during idea formation.

This is just a sliver of the riches in this compact, valuable read: Buy and READ John’s book.

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attitude Business model Competition Creativity Customer relationships customer retention Entrepreneurs Improvement Influence Marketing planning Positioning Restaurants Retail service Small Business strategic planning Strategy

Be indispensable

Sossusvlei Landscape
Are you indispensable to your customers?

The question that you have to ask yourself – daily, rather than once – is “What can you do to make yourself indispensable to your customers?”

A few examples to get the juices flowing:

  • If you sell coffee, how can you help your customers wade through the coffee buzzword maze and enjoy *better* coffee? What’s fair trade? Is it really fair trade, or is it just another marketing buzzword?
  • If you sell cars, how can you help your customers make better decisions, get more from their investment, and save time and money on repairs? How can you help them remember to perform the regular maintenance that allows them to depend on their vehicle regardless of the weather?
  • If you repair lawn mowers, how can you help your customers get a better looking yard, without injury, cheaper, safer and faster? How can you save them time and money on upkeep and repairs? How can you help them remember to change their oil, sharpen their blades and make their mower perform better and longer?
  • If you help people deal with (and prevent) legal problems, how can you help your customers avoid rushing into your office with a problem that has to be solved NOW? Ounce of prevention, pound of cure kinda stuff. Be their lawyer every day or every week, just a little vs. being their rescue squad every 5 years.
  • If you treat people’s injuries and diseases, how can you help them be safer at home and at work? How can you help them by advising them on nutrition and other preventative care, without becoming a nag? Knowing that these things require lifestyle / habit changes, how can you help your customers/patients make that happen? How can you help your patients make sense of the constant flow of health, nutrition and prescription information placed in front of them each day? How can you help them prevent injuries and disease, rather than waiting until they occur so you can treat them?
  • If you sell building materials to professional contractors, how can you help them find more business so they can buy more building materials? Can you help keep them informed about industry promos, tax incentives and other things to help them be more competitive?
  • If you sell advertising (better sit down), how can you help your clients track the effectiveness of all their advertising? How can you help them calculate the ROI on the advertising? Not guesswork, but real numbers based on the foot/internet traffic, revenue and profit each advertising source generates. Who is indispensable, the ad salesperson or the ad salesperson who is also a partner in profitability?
  • If you sell computers, ANSWER YOUR PHONE. Those people on the other end of the phone who don’t know as much as you’ve forgotten about a computer are the ones with all the money. They’d like to give it to you, if only you’ll help them. Yes, to be indispensable in the computer business, quite often it’s as simple as answering your phone and helping them with their problem without being arrogant. In fact, just answering your phone will be a huge first step.

If I didn’t mention the business you’re in, use these things as inspiration to do what makes your business indispensable to your customers. Please don’t make the mistake of thinking that because your specific type of business wasn’t mentioned, it won’t work for you. Likewise, if you’re thinking to yourself that “my business is different, it won’t work for me”, you’re right. If you don’t do these things – they won’t work for you.

The goal in doing all of these things is to position yourself and your business as the only place that your clients will consider doing business. Arrive at that position by doing this kind of stuff and both your checkbook and your customers will thank you.

Take care of them like no one else is willing to.

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Being Prepared

One of the things Scoutmasters teach their Scouts is the Scout motto – “Be Prepared.”

We don’t stand around saying those words all that much (or ever, really).

When I ask a Scout what it means to them, I get a lot of different answers. I talk about it with the boys because I’m curious what it means to them – which tells me where they are preparedness-wise.

Depending on their age and their seriousness when I ask the question, I hear answers that include things like:

  • knowing how to select the right gear for a campout,
  • having the right fishing lures,
  • making sure that bacon is on the menu (not kidding),
  • being in good enough shape for the upcoming hike,
  • making sure the car is full of gas and has proper levels of other fluids/air and so on,
  • having charged batteries in the camera,
  • having a sharpened pocket knife,
  • knowing how to tie a rescue knot, or
  • having the proper gear to safely canoe or kayak a river/stream.

What it ultimately means to me is being prepared for what life/business serves up, whether it’s a class V rapid, an unexpected flat tire during a snowstorm in a remote area, that five figure invoice that your “customer” still hasn’t paid, the new box store down the street, mention of your business in the Wall Street Journal, by Scoble and on TechCrunch, or stumbling upon an idea that changes your life and/or business.

Embarrassment? No.

To someone who has a job, I ask them what they would do if they lost their job today? Are they honing a new or enhanced skill so that they can react quickly to a downturn in what they’ve done for the past 20 years? Do they have a network of people in their current (or desired) line of work that could help them identify opportunities?

To someone who has a business, I might ask them what would happen if the building housing their business burned down, or if their biggest customer stopped buying from them, or if they suddenly got 100 new customers tomorrow.

I don’t ask these questions to embarrass employees or business owners any more than I ask them to embarrass a Scout when asking them what would happen if their friend cut his hand or lost his water bottle on a week-long hike. I ask them so they’ll think about their level of preparedness.

Being prepared isn’t just about having a poncho in case it rains, having backups offsite, and having a marketing plan that never stops finding new customers for you. It’s also about being mentally prepared to deal with what happens next.

Be prepared, not only to take a punch, but to make big leaps when opportunities present themselves.

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Automation Business culture Business Resources Competition Customer relationships customer retention Customer service Direct Marketing E-myth Entrepreneurs Habits Marketing planning Productivity Restaurants Retail Sales service Small Business Strategy systems Time management tracking

A desk calendar, a yellow pad and a pen

A few weeks ago, I mentioned that there were some “numbers you might care about“.

Examples we talked about included figuring out the costs to obtain both a new prospect/lead and a new customer.

In prior discussions, I’ve also suggested that you need to be thanking your customers, following up with them, tracking referrals that customers (and others) make, checking to see that more time than usual hasn’t passed since their last purchase, and so on.

And then…I get emails.

Many of them tell me I’m nuts because no one has time to do all that and that I must be making it up. Others get it and they ask HOW to get all that stuff done.

GETTING STUFF DONE

Here’s part one of a primer on getting this stuff done.

What I mean by “primer” is that it’s simple and you don’t have to buy anything fancy or expensive, nor do you need to do anything geeky. You *can*, of course, but it’s not a requirement.

Start with these tools:

  • A free calendar (banks, insurance agents and others hand them out all the time). A large one-month-per-page desk calendar will help if you feel the need to splurge.
  • a free pen/pencil (ditto)
  • a $0.99 yellow pad

We’ll keep it simple for now and create a process for each of these events:

  • A new prospect contacts you
  • A new customer buys for the first time.
  • An existing customer buys again.
  • Someone calls to make an appointment.
  • You communicate with a prospect or customer.

DIRTY WORK

Now it’s time for the real work.

Use the yellow pad for these tasks:

  • When a prospect contacts you, write their name on one of the yellow pad sheets. Write the date they first contacted you at the top of the sheet. Below or next to that, write “Last contact date” and keep it updated (yes, it’ll get a little messy, but this is a paper system). Ask them who to thank for sending them to you. Write down the answer as “Source”. It might be a person, an ad or something else.
  • Keep a separate sheet for each prospect. Keep the sheets sorted by last name, unless you have a different way that works better for you.
  • When a prospect becomes a customer by buying something, write a C in one of the upper corners of the page so you know they’re a customer. In addition, write the first date of purchase at the top of the page. Write “Last purchase date” next to or below it. Keep it updated each time they purchase. Use a calendar on the internet to figure how out many days since they last bought. Write that down too.
  • When contacting (or contacted by) a customer or prospect, write a summary of each contact on their sheet. Indicate briefly their satisfaction level.

Use the calendar to remind you to perform these tasks:

  • Record appointments. Make note of them on the prospect/customer sheet so you can follow up as well as thank them.
  • Follow up with a note a few days (if that’s the right timing) after a new customer buys for the first time. Write the follow up on the appropriate date as soon as they buy.
  • Follow up with a customer after an on-site delivery or service to make sure all is well. If a staff member or contractor is doing the work, use the follow up to make sure that they were on-time, clean, courteous and took care of the customer’s needs.

Do these every day:

  • Check the calendar for follow ups, appointments, thank yous and such. Make them that day. Don’t get behind or you’ll never do them.
  • Check the contact sheets to make sure that customers are being properly taken care of. Your “satisfaction level” comments should feed this process.
  • Check the contact sheets for customers who haven’t bought in at least a month (or whatever time frame makes sense). Follow up to see why they haven’t been back  and include that on the sheet. If a particular competitor is involved, make note of that.

BOOOOOOORINNNNNNG!

Yes, this is mundane stuff.

It’s also exactly the same stuff that *so many businesses* fail at day-in and day-out. If you can’t get the basics right, you need to fix them.

Disclaimer: The computer guy half of my head insists that I remind you that manual processes and yellow pads don’t scale well (and eventually not at all), meaning that what works for 20 or 100 customers doesn’t work worth a darn for 500, 1000 or 10000.

Because paper doesn’t scale, I know what happens next. You get busy and eventually, you just won’t do the work. This happens despite the realization that doing all that stuff is at least part of the reason you got so busy.

If you do realize there’s a connection there, then you’ll either decide to introduce some technology or you’ll get some help. This kind of work is ideal for a stay-at-home parent, retiree or similar.

Crude? Perhaps. Understanding the value of these tasks – and of a tool that automates much this labor – is easier after doing it the hard way. This effort is just as valid for a four-star restaurant as for an oil change shop.