The January 11, 2010 edition of Crain’s Chicago Business included the Focus Small Business section. They asked entrepreneurs about their New Year to-do list and lessons learned from 2009. Here they are:
▪ Shed Unprofitable Customers
▪ Buy To Diversify
▪ Let Principles Rule
▪ Invest In Staff
▪ Set Goals With Guts
▪ Audit, Then Diet
▪ Make a Don’t-Do List
▪ Go Online To Streamline
▪ Add A Product
▪ Invest In Technology
▪ Grow Customer Base
▪ Trim the Dead Wood
▪ Sell Online
▪ Steal Business From The Big Boys
▪ Boost Efficiency
They also included 7 things you must do now to make 2010 a better year:
▪ Shake Things Up
▪ Scout Talent
▪ Keep Talent
▪ Farm It Out
▪ Don’t Overextend
▪ Tackle Taxes Now
▪ Just Do It
They are all great. Not profound, but straight, direct, and doable. We’ll expand on these in future posts. For now, think about them. Take one or two and try it. You’ll be surprised at how easy it is. It only takes a little time, forethought and implementation.
The New Year provides a clean slate to take stock of the past year and lay plans for the coming 12 months. Here are seven tips to get you started!
Run a Financial Check-up
Are you where you had hoped to be financially for the year? Check your profit and loss, income, and expense reports. Review your sales reports to determine the more profitable areas of business and areas where sales were sub par. Create a plan for increasing business in more profitable areas during the coming year. Either prepare to eliminate less profitable ventures, channels, or market segments, or create plans to increase their profitability.
Prepare a Budget
Examine your projected budget and actual expenses for the year. Prepare a budget for the New Year, and resolve to stick to it. Factor in expenses for computer and software updates and new equipment purchases. Be sure to allow for changes in your marketing strategy for the upcoming year. Prepare a list of areas to cut if profits or cash flow start running below expectations and a list of contingent opportunities to add or increase if cash flow runs higher.
Businesses that fail to plan, plan to fail. Create that fresh business plan you’ve been thinking about. Or, if your financial check-up shows variances, fine-tune your existing business plan for the coming year. Set aside some quality time in January to lay the groundwork for future sales.
Create a Marketing Plan
Evaluate your marketing mix for the past year and make changes for the better for the coming year. Freshen up your marketing message and strategy. Are you consistently getting the right message out to the public, or do you find your strategy and materials are sending out mixed messages?
Update the Database
Review your database, updating information as needed. Renew contact with lapsed customers and touch base with your existing customers. Ask for more referrals from some of your best customers; connecting their associates’ business with yours is a win-win situation. It is a quick and inexpensive way to increase business.
Review Staff
Identify staff behaviors and accomplishments that should be acknowledged or even rewarded. Also, identify those whose behaviors or work needs to be addressed and improved. Everyone wants feedback on how they are doing. If you have difficulty remembering pertinent examples, schedule a few minutes each day or week to update notes (both positive and negative) for performance reviews for each of your direct reports.
Learn Something New
Resolve to update or improve your professional skills. Take a class or plan to read a book or two in an area in which you feel you could use more training.
If you are trying to steer a new course, be sure your seasoned veterans and new recruits are on board!
It Takes Many Hands to Move a Ship
Maybe you have heard from, or commiserated with, other owners and managers who have been trying to “turn the ship” and feel that it is a solitary endeavor. Steering a new course is always challenging, but if you agree with the premise that it is easier to steer a ship when all hands set the rigging toward your intended heading, then it makes sense to bring your “crew” up to speed with your plans and not to consider them as adversaries. If you see yourself as solely responsible for bringing about change, your employees will probably wonder where, if at all, they fit into your plans. When they know “something”—but not “what”—is going on, they may fear that any action might hinder rather than assist your change, or they may take incorrect action. This can take the “wind out of their sails” and cause them to step back and avoid any actions that you may potentially welcome.
Keep an Open Mind
If you are coming into a new situation, keep an open mind about an individual employee’s performance. Most people perform differently under various circumstances. Evaluate any information given to you by previous management in light of your own observations. Communicate and interact with employees to learn more about their strengths and weaknesses and how they interact and work with others. You may be able to inspire a disgruntled or underutilized employee to step up and meet new challenges. Going into a new endeavor with a “clean house” approach usually becomes a self-fulfilling prophecy and can cripple your business, leaving it short on valuable experience. Better to go with a “clean slate” approach.
Address Employee Fears
Employee resistance to change is largely based on fear of change. If your employees appear to be resisting change, ask questions to find out why. They may fear that the company will not survive a change or that they will lose their job. Change may bring specific challenges to them that they feel ill-equipped to meet. Communicate your reasons for bringing change to the company and the negative consequences of not taking action. Listen to and acknowledge your employees’ thoughts. Try to minimize the hardships of change for employees. If job responsibilities are changed, offer an opportunity for training. If an employee wants to take this opportunity to try something different, see if this can fit with, or even facilitate, your plans. If you need to cut staff in some areas, retained staff will judge how you handle it. You might shuffle staff in different groups; give ample notice; or provide outplacement assistance, severance, or re-training.
Communications priorities sure have changed as email tries to take over our professional and personal lives. We are all inundated with emails. It’s overwhelming. We need to be selective – we understand all of that and do our best. Yet, it doesn’t stop with emails. There are those which I call the email permutations: texts, tweets, IMs, Facebooking, Pings, etc. And as if that’s not enough, there are the pre-recorded phone calls, cluttering the way for the poor sales person who does attempt to make cold phone calls (I still have a soft spot for them). Then, there is snail mail. And, between all of those, there are the many phones and voice mails we seemed to be chained to – for whatever reason.
The dilemma is: how to respond?
Let’s put them in perspective or – dare we say – priority with a corresponding responsibility when you are on the receiving end.
The personal phone call (or voice mail) – When I want to speak with someone, I pick up the phone and call them. It still has the most professional impact, and personal interaction goes a lot farther than any other means of communications. Yes, I know the college kids today mostly communicate via text message, but that should change in the workplace. At least I hope it does!
Responsibility: Call me old fashioned, but if someone takes the time to call me personally, I return the call. I may not be able to do it immediately, but I do respond. It’s professional courtesy. And, people don’t forget.
The personal email – Amidst all of the email clutter, there are emails from people who just feel more comfortable sending an email. Or, maybe it’s the best way they can communicate. I’m a perfect example. While I would rather pick up the phone to communicate, sometimes I run out of hours in the business day. Being a business owner, my day doesn’t stop at 5pm. As a night owl who is productive when the phone stops ringing, I can crank out a lot of responses and outreaches via email.
Responsibility: If someone takes the time to send me a personal email, I either respond via email or phone. It may take me a while to either get to it or find the time to craft an appropriate response, but I usually respond. I say ‘usually’ because with the number of emails (400 or so a day), some can get inadvertently lost in the ever-growing inbox or deleted in the semi-weekly purge.
The rest – And then there is the rest of the story. Depending on your chosen method (or generation) of communication, you brand yourself by your outreach and by your response.
Responsibility: No matter what your choice of communication, your response brands you. It demonstrates your image, professionalism, and respect for clients, colleagues, and business associates.
Your Professional Business Courtesy makes the difference When SMARTBusiness Matters.
I was talking to a friend the other day about writing. I told her that to me, being a writer is like being an artist, a musician, or a comedian—you either are or you aren’t. It’s one of those innate things that you can’t learn or successfully mimic, and you certainly can’t get rid of it. It’s who you are.
Regardless of the position I’ve held, writing has always carried me through. This past year, I’ve moved from full-time writing to strategic development and operations infrastructure. It’s been great fun but has represented a major change in the way I work—I’ve gone from telling stories in a narrative form to telling them via a much more analytical concept. But, I’m still telling a story.
No matter what you do, you’ve got a story to tell. We’re all writers in our own way—every interaction communicates something. What are you really saying? Are you telling people that you’re open to change and ready to make a difference, or are you conveying the status quo? Do you invite a dialogue or subtly shut down communication?
People pick up on much more than you think—with more than 90% of our communications being conveyed non-verbally, your story is more than your words. You’re telling it right now, make sure it’s a good one.
I have a pretty large desk, and I keep two calendars—one at either end to accommodate whichever way I happen to be facing. I’m a writer so, naturally, one of those calendars is about books. The other gives a quote a day. This one stopped me in my tracks:
How would you like a job where if you made a mistake, a big red light goes on and 18,000 people boo?
- Jacques Plante, hockey goalie
I’m about as far as you can get from a sports fan, but I sympathize. I know what it’s like to feel like you’re in a fishbowl, on display with everyone watching to see what move you’ll make next. The fear of making a mistake—let alone a high-profile mistake—can be paralyzing. What do you do? Do you stay small and play it safe, or do you embrace the challenge and play it big?
In these uncertain times, employees are carrying a heavy mantle as they’re asked to shoulder the work of laid-off colleagues. Don’t let it stop you from doing what you need to do. No matter what company I work for or what I’m doing, I always manage to put myself out there. If I believe in my work, I’m passionate about it. Consequently, I’m willing to take chances. The risk for failure is great, but the rewards are even greater.
Naturally, I’ve stumbled, but I’ve owned it each time. And most importantly, I’ve learned from it. Thankfully, I haven’t had an arena full of people jeering at me, but even if I did, I wouldn’t let it stop me. Believe in what you do, show up fully, and do your best—the rest will work itself out.
Great leaders know there is no sense in blazing a path if nobody will follow. You have to own the responsibilities of leadership as well as the trappings in order to create an effective team.
A simple definition of leadership is “the ability to lead.”
As business owners and management, you are expected to direct, guide, or command a group of people and a variety of business activities. Leaders are people who set the path of and the tone for their companies’ objectives. Hopefully the path you’ve chosen will be a good one, but it is important to remember that you also have to take responsibility for the weaker decisions you will ultimately make. More often than not, how you handle the bad times defines your leadership ability to your staff and others.
Recognize your strengths and weaknesses.
Nobody is perfect. We all have strengths, and we are all flawed in some way. Often, leaders are tripped up because they don’t recognize their weaknesses or their strengths. At other times, they stumble because they don’t realize that, if overused, their strengths can become grave weaknesses and that a weakness may, at times, be their strength. Great leaders are self-aware.
Be willing to learn what you don’t know.
Great leaders recognize what they don’t know and are willing to learn from their staff, associates, and others. They listen to their staff and customers, solicit input, ask questions, analyze information, and then make the best decision they can with the information they have. While they are willing to redirect their course when necessary, they don’t vacillate in decision-making.
Keep the lines of communication open.
Communicate your vision for the company and its programs. Outline the mission to be accomplished so that everyone understands in which direction the company is headed and what is expected of them. Encourage all your employees to communicate. You want to keep communication flowing up and down through the chain of command. Great leaders “connect” with their staff and others and have the ability to pull many people together to achieve their goals.
Build a culture of trust.
Be honest and open with your staff in order to foster a climate of mutual trust. Engage your staff’s talents and rely on their strengths and advice. Provide constructive criticism to them but also be a system for support and a sounding board for them. Hold your staff accountable for their actions, but be sure to hold yourself accountable too.
Recognize and applaud the efforts of your staff.
Let employees know when they’ve done a good job, and be sure that they are recognized for their hard work, their brilliant ideas, and their many contributions to the company. Resist the urge to take all the credit for a project. Your recognition is important in encouraging employees to reach new heights. Great leaders realize that they get more done by effective delegation to employees willing to take on new challenges.
Great leadership comes with experience and continued growth.
Assess your leadership style and skills, and continue to learn and grow in areas where you may lack expertise. Your staff will appreciate your abilities and your dedication to your responsibilities. If you lead, they will follow.
A lot of street-smart business owners tend to use their tried and true method of business analysis – gut feel. While we pragmatic business people are known to just roll up our sleeves and start working, there are other tried and true methods of business “score-carding” that can help you make SMARTdecisions.
SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is a well-known strategic planning method that can help analyze the value of a project, business venture, and the business-at-large. SWOT is best carried out by a team of people — bringing together different business disciplines, views, and experience (for example: a manager, an accountant, a salesperson). So if you don’t have a broad representation in staff, ask professional friends and representatives of your target market to assist.
SWOT analysis is more effective if you first determine a specific objective. Your objective might be to increase sales of your new widget, at a strategically lower price, to account for 10% of your gross this year. Once you have an objective, assess your strengths, weaknesses, opportunities, and threats as they relate to that objective.
An illustrated diagram of SWOT analysis often takes the form of a box with two rows and two columns that create four squares: the two squares in the top row are for Strengths and Weaknesses (your company’s internal conditions), and Opportunities and Threats (external factors) are listed in the squares on the bottom row. The left column (Strengths and Opportunities) contains positive, helpful factors; the right column (Weaknesses and Threats) contains harmful factors.
Begin by determining and listing your Strengths: the attributes of your company that can help in achieving your objective, and your Weaknesses: those harmful factors that can prevent you from achieving your objective.
When thinking of your strengths and weaknesses, think of the 5Ps (product, price, place, promotion, and positioning), staff, finances, customer base, manufacturing, technology, infrastructure, etc. Your strengths might be an ace salesperson, a quality product, and a solid infrastructure to deliver. Weaknesses may be a small advertising budget, weak marketing plan, and no marketing staff.
Next, factor in external conditions in the bottom two squares. Opportunities, on the left, are conditions that may help you to achieve your objective. Threats, on the right, are harmful, and potentially disastrous, to achieving your objective. External conditions include technological changes, legislation, economic factors, social factors, the marketplace, and your competition. Your opportunities may be that one competitor has closed shop, a second competitor sells higher priced widgets, and the marketplace is looking for a lower priced widget. Threats may be that overall, widget sales are down, your competitor has a widget with added benefits, and there’s talk of adding a widget tax.
A SWOT analysis can help determine the steps you’ll take to achieve your goal. It can also help you to determine whether a goal is attainable. If not, develop a new objective and retest. And, it can help you identify your Achilles heel – perhaps glaring to others, but not necessarily those working in a specific project or business. Once you have your list and your analysis shows you have an attainable goal, you and your SWOT team can ask questions. How can we use and exploit our Strengths? Can we mitigate our Weaknesses? How can we benefit from Opportunities? How will we cope with Threats? How do our Strengths match up to our Opportunities? Can we convert our Weaknesses and Threats into Strengths and Opportunities?
We just helped a client complete a SWOT on their entire business. Like so many businesses who need some marketing and sales help, they wanted to just jump right in. Many times, it becomes: fire!, ready, aim (rather than ready, aim, fire!). We used a SWOT to help us understand the elements of success and potential curve balls that could hurt the business. That helped us in creating a marketing plan, specific messaging, and targeted campaigns. We go so far as to rank each SWOT element so that we can graph the areas that we want to highlight and those that need attention. In this case, our client now clearly has specific talking points for the sales group and objectives for operations. And, it’s succinct and visual.
SWOT is a great tool to analyze your most pressing business objective, and you can adapt it to assess other aspects of your business — such as analysis of each of your competitors as part of your marketing study.
Every tool has its upside and downside. SWOT is great in helping you objectively look at critical areas of the business. It also has a weakness. Don’t fall into the trap of compiling lists that may not be crucial to achieving your objective or desired outcome, or use this tool to delay making decisions critical to your business. Be critical and honest when seeking to convert Weaknesses and Threats into Strengths and Opportunities. Don’t try to use weak Opportunities to offset strong Threats.
SWOT is a long-time favorite of marketing types who analyze products, promotions, projects, etc. This tool is a very practical, SMART way to look objectively at a business situation (large and small) to diagnose upside, downside, inside, and outside – in a straightforward manner.
We call our process the SMART SWOT. It goes a long way When Smart Business Matters.
