The Silver Lining Around This Financial Cloud
I’ve been meeting with a lot of very interesting business owners lately. People are dealing with all kinds of challenges, but of course the economy is hanging over every decision. It’s increased pressures on many dimensions, both personally and in business.
But there’s some key things we need to remember about these times. First, EVERYONE has to deal with the economy. It’s not like the planet is beating you up personally, even though it feels it sometimes. Your competitors are dealing with the same situation, as are your partners, suppliers, and customers. So don’t take the entire weight of the world on your shoulders.
Second, customers are more price-sensitive than they were 5 or 10 years ago. They’ve always been sensitive to the tradeoff between price and value, it’s just that the balance has shifted towards price. That doesn’t mean people don’t care about quality and value anymore – in fact, I’ve spoken with many quality-oriented businesses that are starting to see the balance shift back a little. It will change slowly, so make sure that you have some good deals for those customers who have to pinch pennies. There’s lots of them. If you develop a good relationship now, they’ll continue buying from you as things recover.
Third, recognise that a time of turmoil always rewards creativity. It’s quite exciting to talk with so many people who are trying innovative things – switching over to cheaper digital media for their marketing and customer service, or combining products into new bundles and packages, or restructuring their services. What these people are discovering is that these ideas would have had great value ANYWAY, it’s just that the economic stress forced them to ask the tough questions and get creative. They’re doing things which are different, which make them stand out from the competition.
And remember to take time to work ON your business. This stressful situation can cause you to try to work 24/7 – yes, even while you’re sleeping. But take some time to think about the larger picture, what will sustain you for the long term.
Car Dierschow
Small Fish Business Coaching Fort Collins
www.smallfish.com.us
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Creative Marketing
I had a chance to go to the inaugural meeting of the local Executive Center Roundtable this morning. It was a good example of taking some good ideas in marketing and adding a creative twist.
On the face of it, this group looks a little like many of the networking and leads groups that have grown like weeds here in northern Colorado. From what I’ve seen, this is a huge trend all over the globe as small business owners discover the power of marketing via referrals and personal connections.
What’s interesting about this particular group is that it’s not sponsored by a networking and business-building services company, nor was it started by an individual who was struggling in their business development. That covers most of the other networking groups I’ve seen. Instead, this is sponsored by The Executive Center, which provides office space for startup and very small businesses, as a way to provide professional, productive office space.
Why would such a company want to sponsor a networking group? It’s actually a carefully considered strategy. First, value is given to clients of the Center when they interact with each other and with other similar small businesses in the community. Second, new clients for the Center could very well stem from people who participate in the Roundtable and see the value that the Center can provide. Third, this will probably result in referrals for new clients for the Center.
Kudos to Amanda, who took an idea that has great energy in the local market, and added some unique aspects which serve her target customers to bring in new business.
As an extra bonus, I saw this morning that the waiting list to get into this meeting was as large as the people who came – the limit stemming from the size of the room. This shows that a buzz has been created in the community, something that we all strive for but often find so elusive. Just a few hours after the meeting, the next one is nearly full, and will no doubt have a waiting list by the time you see this. It’s quite possible that a second similar group will be able to start, thus expanding TEC’s marketing reach to a whole new set of entrepreneurs.
This is a great lesson in marketing creatively!
Carl Dierschow
Small Fish Business Coach Fort Collins
www.smallfish.us
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The External Point Of View
I’ve worked with a number of business leaders who struggle to have the time to connect up with others outside their business. There’s a tremendous amount of activity going on; who has enough hours in the day to go out and form new relationships?
But it’s critical to do just that. Here’s the problem with your existing relationships: They each exist for a purpose, and that’s not to help you look at your business in a more holistic way. Your managers and employees depend on you for direction and income, so they’re not likely to raise issues that expose their weakness or nervousness. Your customers depend on you for products and services, and don’t want to rock the boat. Your suppliers, likewise, get their income from you, and don’t want to do anything that might jeopardise that. Your family focuses on harmony and other values not related to the business, and will avoid things that create disharmony.
Who’s going to ask you the tough questions that will help you to change your perspective and think through your business issues? Well, that’s what a business coach does, but there’s other people who can fill this role as well. I always encourage people to look for experienced mentors, especially those who have already experienced the kinds of stresses they’re under. Even if the mentor didn’t fully succeed, he or she certainly learned a great deal through the process.
Another alternative that I’ve had success with is mastermind groups. This is a concept first introduced by Napoleon Hill back in the 1930s. In the business context, you can think of it as a bit of a “virtual board of directors,” where each person in the group has an interest in helping the others to succeed. This can be quite valuable for a long period of time, especially after the members work with each other long enough to develop deep trust. I set up one of these groups myself, and found it to be quite useful for each participant.
Just don’t think that you have to figure out every tough business problem totally on your own. There are plenty of people who can help, and different kinds of relationships which will help you work through those issues.
Carl Dierschow
Small Fish Business Coaching Fort Collins
www.smallfish.com.au
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Marketing On A Shoestring Budget
I was reading a great article on Marketing on a Shoestring Budget, which had some ideas I thought I’d share with everyone.
The first step – this should be obvious – is to develop a marketing
plan. But many business owners’ plan is essentially “get our name in front of potential customers,” which is much too simple. First, you have to decide who your target customers are. It’s not just anybody with money in their pocket, it’s people who have a specific need that you can help them solve. What’s that specific need? What’s so compelling about your product or service that they would happily part with their money in exchange?
These are not easy questions. If you think they are, you’re not digging deep enough.
Now that you have your plan in order, you can start looking for the most effective ways to reach your prospects. It’s surprising how many new free and cheap tools have emerged – not only because of the internet itself, but also because people are connected in so many ways. That article lists seven lead generation activities that have been shown to be highly effective:
1. Trading (bartering) services
2. Offer free information
3. Share customers
4. Ask for referrals
5. Cold calling
6. Writing
7. Creating an event
Companies that I work with often look first at POA – Plain Old Advertising in the mass media, phone books, and so on. These can be quite expensive, and honestly, are ignored by many people. We no longer subscribe to magazines and newspapers, we zip through television commercials, and I’ve used a phone book exactly once in the last year.
If you’re looking for smarter ways to use your precious money, there’s a lot of alternate channels which can more quickly establish your brand position and create customer relationships. We’ve seen an explosion of networking groups, both online and in person. Websites and other publications are always looking for people who can write compellingly and convey useful information. And in businesses which are based on referrals and word of mouth, there are plenty of other companies with complementary products and services which might help you to get in front of qualified customers.
I’ve often seen small businesses struggle with the tradeoff between trying new things and sticking with something long enough that it can actually be effective. A classic example is print advertising – if you just stick one ad in the paper, it will never make an impression. If you print the same ad for a week, people will start to actually notice. If you do it for a month, people will begin to understand your message.
This is why a plan is so important. Understand your strategic priorities, pick a few things that appear to have the most value, and then stick with them long enough to make a difference. In general this will be a year or more for a general brand image, and a month or more (but with greater intensity) to promote a specific event. Give your marketing investment a chance to work.
Carl Dierschow
Small Fish Business Coaching Fort Collins CO
www.smallfish.us
Steve Eastwood 14-May-2011 12:34 PM
I like this Carl, especially the point about making sure we are very certain who the people are that are actually going to take the money out of their pocket and pay us for our product or service. After we know that - THEN make a plan how to find them.
New Year, New Energy
As we kick off 2011, it’s a great time to take advantage of the sense of renewal that comes with this yearly cycle. Sure, it’s artificial. There’s not much that actually changes just because we’ve changed the year to a new number.
Then again, your customers and employees are a part of the larger society. As a whole, we do focus on different things at different times of year. In the US, there’s an increased focus on health, we’re hunkering down for the winter, and we’re starting to think about summer vacations in a few months. The stress of the holidays has mostly passed, perhaps replaced by some anxiety around finances.
In your business, how can you build on this attention? Would it be helpful to link your company’s attention to finances to what employees are thinking about? Can you connect customers’ attention to wellness to how you’re marketing your products and services?
People may also have a bit more willingness to look at new ideas. It’s a new year, and there’s a new energy that builds up around that. So is it a good time to start a discussion around a change to your business that you were putting off because of all the pressures around the end of 2010?
2011 may just be the best year yet for your business!
Carl Dierschow
Small Fish Business Coaching Fort Collins CO
www.smallfish.us
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A Business Plan You Will Use
I was reading an article today about common mistakes people make when writing business plans. It wasn’t bad, but it reinforced my assertion that there’s different kinds of business plans. The ones the article referred to were for getting funding, and they expected to be on the order of 30+ pages.
Fine, I suppose, but you’re never going to USE it.
Here’s where the one-page business plan comes in useful. The key is simplicity and focus, which includes:
• What your business does, and why it does it
• The tangible goals and objectives
• The key things you need to focus on to succeed
• The actions you’re going to take to ensure those areas of focus are achieved
This can fit on a single page. That’s quite important, because you’ll only be able to remember this plan and focus on it if it’s simple, straightforward, and addresses the critical decisions. This is also why it’s crucial that you, the owner of the business, write it in your own words.
If I were to add anything to this, it would be the key business metrics. Some people might prefer to have that in a different place, though, because it’s not strictly a PLAN.
But the 30 page plan? Use that to wow your investors. Just don’t expect people inside your organization to get much motivation out of it.
Carl Dierschow
Small Fish Business Coaching Fort Collins CO
www.smallfish.us
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Five Reasons Why You Don't Want Other People's Money
It’s tempting to want to look to others for money to fund your business, to get more investors on board and give you some cash to maneuver with. But I thought I’d highlight a few reasons why you might want to think twice about this:
1. Money always comes with strings attached: Despite your best intentions, there are always expectations and conditions to receiving money. If you’re borrowing, that’s pretty clear: You have to pay it back, with interest, in the required timeframe. If you’re borrowing from a relative, often people will do this with a less rigorous contract. That’s dangerous, because then the emotional ties start taking over as time goes on and enthusiasm wanes. It’s easy to do permanent damage to family relationships because of borrowed – or even gifted – money. If you get an outside investor, you might have to relinquish some control of your company to them. Or there might be less structured ways that they could make your life miserable.
2. It creates another stakeholder to worry about: In addition to your customers, your suppliers, your vendors, and your partners, now you have an additional party who brings a different set of needs to bear. The broader your attentions, the less focused you’ll be.
3. It obscures the true state of your business: Outside money can appear as an asset or even masquerade as revenue, but that’s not the reality. You can easily fool yourself into thinking that you’re more profitable than you really are, which can cause you to make unbalanced decisions.
4. It weakens your core purpose: Assuming that your primary business isn’t to take money from investors, you should probably spend the bulk of your time worrying about how to deliver value to CUSTOMERS and build your revenue stream from that. Adding other work doesn’t help, and it confuses your employees to have to add another requirement to the list that usually doesn’t contribute to the purpose of the company.
5. It tends to make you greedy: Using others’ money seems to be an easy path to short term profit, and as you get better at it, it becomes more attractive. But you’re really sacrificing the long term growth of a healthy, customer-sustained business. “More businesses die from overeating than from starvation.” – as retold by David Packard
Now, assuming that you understand the implications of these points, and you’re still considering looking for outside money, think carefully. Only accept obligations for the amount of money that you really, truly need, and will have a profound impact on the survival of your business. No more.
Carl Diershow
Small Fish Business Coaching Fort Collins CO
www.smallfish.us
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What Makes Your Business Memorable?
This is a question that I’ve seen a lot of businesses lose sight of: What makes you memorable?
It’s not as obvious to answer as you might think. If I have a restaurant that serves standard fast food, then sort of by definition … it’s forgetable. The next time someone is looking for a quick bite, it’s just as likely that they’ll pick somewhere else.
But it’s not obvious that we should be memorable merely by having a better product. In fact, that’s quite hard, because the margins are so tight in this industry. So if I serve better quality food, and try to charge more to recover my costs, I might as well lose customers to the cheaper competition across the street.
Fortunately, there’s many other factors that people could find memorable. Imagine a customer telling their friend about your business:
“They’re ALWAYS friendly!”
“They made a mistake the other day, but they went overboard to make sure that they took great care of me when they figured it out.”
“They’ve got one great product that I have a hard time finding anywhere else!”
“They’re always playing great music whenever I’m in there.”
“It’s a great place to relax and have a conversation.”
“Their packages are really cool!”
This is just as true for B2B, businesses that sell to other businesses. After all, you’re selling to real people, even if they happen to be buying on behalf of a company. If you’re memorable, people will think of you first, and give you the benefit of consideration when they’re undecided.
Be memorable! It doesn’t even have to cost extra.
Carl Dierschow
Small Fish Business Coaching Fort Collins CO
www.smallfish.us
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The 10/80/10 Rule
I had a great discussion today with Hugh Liddle, a local sales coach, who described the concept of “the 10/80/10 rule.” I hadn’t heard this before, so I thought I’d share it with all of you. It’s quite pertinent to our current situation.
Here’s the idea: When people are under times of crisis, you’ll find:
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10% of the people make the wrong decision and fail.
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80% of the people wait for someone else to fix the problem, and remain stuck until someone starts leading.
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10% of the people become leaders – they take action, they make decisions, and they’re the ones most likely to succeed.
Apparently this observation came from looking at people who survived the 9/11 disaster. A few people took charge and started leading people down the stairwells in the towers, and they were the ones who likely survived.
But this model also seems uncannily accurate in the current economic crisis, doesn’t it? Indeed, 80% of the people are waiting around for the governments, or bankers, or SOMEBODY to fix the problem. It just seems so large and intractable for the individual to deal with.
And there are a few people who are actively doing the wrong things. They’re freaking out, they’re overreacting at election time, they’re doing anything to escape from the economy. The paths of their lives and their life savings may be ruined.
But there’s a few people – 10% doesn’t seem a bad estimate – who are figuring out how to deal with this. Many of them are running small businesses, because that’s where the opportunity lies right now. They’re focusing on what customers need, they’re addressing real problems, and they’re changing their products and services so that people will actually buy. Others are starting to notice, which gives me hope that small business will lead the economic recovery.
Which part of the population do you fall in?
Carl Dierschow
Small Fish Business Coach, Fort Collins Colorado USA
www.smallfish.us
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The Myth of What Customers Want
There’s a simple formula to business success: Do what your customers say they want, they’ll reward you with money, and everybody will be satisfied.
The problem is that it’s not true.
OK, there’s SOME truth to it. If you don’t do what your customers value, they’re certainly not going to pay you money to deliver it to them, and your business will fail. So the problem is that this logic is much too simple.
First, let’s make a distinction between what customers SAY they want, and what they REALLY want. There’s many situations in which people like to talk about things on the surface, not their deeper emotions. I was talking with a business owner yesterday about the impending post-holiday rush of people who will be looking into their fitness, and one challenge is that people like to FEEL better about their health than to actually BE in better health. They’ll come to you asking for exercise programs, but lose interest as they realize that it’s going to take some time before they actually begin to feel better.
Another distinction is between what customers WANT and what they truly NEED. Their wants tend to change by the hour and by the day, and changing your business to track every fad can be quite difficult. On the other hand, if you’re able to address their deeper needs, you’re able to develop a much deeper relationship between you and your customers. They might ask for the latest technology to let them keep in touch with Grandma, when in fact their deeper need is to address the fact that they’re feeling disconnected from relatives scattered across the country.
The most important observation about addressing customer wants and needs is that they don’t really care if you can do it profitably. Intellectually, we can agree that we’d like our suppliers to stay in business for the long term and therefore they need to be profitable. We just rather that profit is made from other people, not us.
So this is the big challenge for businesses: To deliver products and services which address important needs, to make the connection between what customers want and what they need, and to do it profitably so that we can stay in business. But if you’re doing something that customers truly want and need, they’ll generally reward you with their repeat business, referrals, and a profitable balance sheet.
Maybe doing what customers say they want isn’t such a bad idea after all. But it’s just the starting point.
Carl Dierschow
Small Fish Business Coaching Fort Collins, CO USA
www.smallfish.us
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