Small Fish - Small Business Tips and the Latest News

Monitoring Working Capital Improves Cash Flow

A recent article by VECCI (Victorian Employer’s Chamber of Commerce and Industry) quoted ASICs figures showing that nearly 10,500 businesses entered external administration in 2011. Many were small businesses and analysts suggest the higher number of insolvencies is due to a crackdown from banks and the Australian Tax Office, which are pursuing unpaid debts and tax liabilities harder than before.

Business already pushed to the limit with overdrafts and loans are stretched as far as they can and with cash dried up, they have nowhere to go but call in the administrators.

The truth is that many business owners fail to understand or know their real Working Capital requirements and therefore expand too quickly, make bad business decisions or waste money with inefficiencies. This leads to additional requirements for cash and puts pressure on an already strained cash flow.

It’s important to understand the Working Capital requirements because understanding this figure will help understand how to improve it, and therefore keep more funds in the business.

So what is working capital? In a nutshell:

[Stock you have on the shelf +Work in Progress (labour and Parts) + Raw materials + Finished Goods] plus [Money customers owe you] minus [Money you owe your suppliers and other payables (rent etc)]

Business Coaching and Sports Coaching - Common Mistakes

Implementing and driving a process of change in a business is like coaching a sports team. You have to get the basics right before you start to win. 

These are some of the many similarities we found out when Tim Edwards (Guru sports coach, lecturer, academic and part time surfer) shared with us at the Small Fish Business Coaching conference a few weeks ago.

Here are EIGHT common mistakes made by sports coaches – many have great similarity in the business world.....

Mistake No 1:   Failure to recognise that change takes TIME

Many sports coaches forget that it takes time to mould a team to success. They expect instant results without doing the basics. Good coaches who take on new teams in AFL and NFL think years in advance and don’t expect to achieve success until two or three years out. They plan for it, knowing that getting the basics right is the first priority, building on them, then winning the premiership will come later.

Just so, business owners must understand that just by taking on a coach, things won’t change overnight. It takes time to implement a change program in a business. You have to get the strategy right, put the right systems and processes in place, understand the market, implement a solid sales plan, and nurture your customers, just to name a few. There are a myriad of small incremental changes that must take place before the business can start “winning”. Don’t expect to be driving the Lamborghini in year two.

Mistake No 2:  Failure to get everyone to PARTICIPATE

How many times have you seen a line of budding young sports stars being put through their paces by their coach. All lined up and one at a time practising their goal kicking. That’s all very well but soon the other 14 are as bored as anything and the coach looses them. Coaches would do better to ensure everyone is fully engaged all the time during practices. 

As in business, everyone should be engaged in a change program. It’s no use trying to change things if half the people don’t know what’s required. PARTICIPATION is the key to make sure change is driven deep into the organisation. It’s all too easy to lose sight of getting everyone in the business fired up about a change program.

Mistake No 3:   It’s all about BALANCE

How many times do coaches forget that if they are going to spend 50 % of their time in offence and 50% of their time in defence during “game time” then they should practise in that proportion? All too often coaches practice only one or the other and wonder why they lose during game time.

Just so – it’s no use spending all the focus on growth, like sales and marketing, and forgetting the back end of the business- customer service and delivery. All that ends up happening is that sales pour in the front door and fall through the cracks out the back by bad service and poor delivery.

Mistake No 4: Not making the best use of TIME

In sport coaching, some coaches just spend too much of the session talking and not enough on practice. Motivational speeches serve some purpose, it's true, but not at the detriment to good old fashioned practice of the basics. If you have a group training session once a week for an hour, it’s the coach’s job to make sure every second counts.

Business coaches too should be mindful of making the best use of every valuable second with their coachees. A coaching program that allows an hour a week face time must be disciplined, focused and geared to get the most out of the time allotted. Good preparation by both parties will ensure this happens.

Mistake No 5:  The GENIUS in us is not always best

It’s so easy to think that a team will win if we come up with that genius strategy on the day, or that we have that genius “magic bullet” idea that’s going to save our bacon. It’s far better to concentrate on the basics and get them right. Practise them over and over until they are perfected. Remember that the simple systems often work the best.

In business we hope that some brilliant idea or concept will save us or we expect our business coach to come up with it, when all that is needed is to make sure that the simple basics are followed. Strive for the proper execution of a simple solution rather than a part execution of a brilliant solution.

Mistake No 6:  Failure to START SLOWLY away from game time 

Coaching a team from scratch to winning a premiership takes time and the plan needs to build slowly. A good sports coach will know the limitations of the team and break things down into little steps, get these right in practise, and build slowly on these steps. No one can learn a skill in “game time” -they must be practiced.

Just as in business, a coach should help the business owner and staff to develop their skills out of context of the real business scenario. For example if great sales skills are needed, role playing could be used to develop these skills. Handling objections can be tested and worked on. Practice the basics slowly and get them right. This places the person in a much better position in front of real potential customers.

Mistake No 7: There’s no motivational speech that wins matches

A really well drilled, well skilled team who knows their systems and execution, beats a great motivational speech on any game day. A coach shouldn’t be there yelling advice from the sideline. Honestly –it’s too late by that stage to have any effect on the real performance of the team. 

Just as in business – it’s not about a lining up all the staff on a Friday and giving them a great “ra-ra” speech. While it certainly helps for the business owner to stand up and tell the staff what’s going on and what the plan is – a plan shared and communicated well within the business, involving everyone and getting them engaged provides a far better result than a “rev up” once a month!

Mistake No 8:  Recognising that sometimes it’s just plain HARD!

We should make sport and business fun, it's true, but we should all be mindful that sometimes it's just hard! Times are tough right now for small business. However, after going through a tough patch, the real enjoyment and gain is knowing you came through, overcame that adversity and achieved something of value. Now there’s the real awesome outcome we all should strive for.

Steve Eastwood 

Using Teams in Small Business

One powerful tool often used by big business to boost productivity and improve outcomes is the use of Teams.

Teams are a small group of people (or staff) with complementary skills, who are committed to a common goal or purpose, set of performance goals and approach for which they hold themselves accountable (Katzenbach &Smith 1993).

Other essential elements of a team is that they have knowledge of each other, a skill to work together, trust, commitment and a shared identity. Teams are held together by their interdependence and the need to collaborate to achieve a common goal.

Typically teams are set up in large organisations such as the military, hospitals, government organisations, production or R&D facilities. They can be used for many and varied purposes such as assembling a product, providing a service, solving a clients problem, developing a new product or searching for new opportunities.

There is however great merit in using these same models in small business.

One of my clients for example is using a Team to roll out a new IT operations system in their business. The Production, Installation and Administration managers, along with the external consultant have formed a Team to make sure the rollout is carried out in the best possible manner.

Each person brings complementary skills to the table, and coming together for this specific task they have provided huge benefits to the rollout. There is a schedule, a plan, accountability and all aspects of the business are represented to make sure mistakes are limited and the rollout proceeds the best possible way.

This means that the business owner is free to overview the process relying on the depth of the business to carry out the actual work and make the best decisions.

Using teams in small business allows for a broader spectrum of problem solving, and if knowledgeable people are brought to the decision making process, mistakes are limited and a greater level of possibilities can be uncovered. It gives individuals more accountability and this can improve job satisfaction.

So if you have a problem, task or a new initiative in your business, consider putting together a team... it could be beneficial and increase the speed, efficiency, quantity and quality of the outcome.

Steve Eastwood
Small Fish Business Coaching Melbourne
www.smallfish.com.au

Tips For Getting The Best Out Of Your Team

At Small Fish Business Coaching one of the areas we concentrate on to improve profitability is Increased Productivity. This means getting the best out of your team which leads to better performance and in the end –increased profitably.

After all, its Business coaching isn’t it?

Here are some tips for business owners and managers to improve profitability and performance in their teams:

1. Communicate clear expectations - For people to perform well and continue to grow and learn they need to know what’s expected of them. At Small Fish we help business owners formulate a “Strategy on a page”. This clearly defines the Vision for the business, the VITAL FEW things that need to be done to achieve that vision and the individual strategies that must be accomplished. This can be shared with staff and strategies can be related to individual expectations, which become the standards by which performance will be judged. At least they will know – “this is what I need to do to achieve the strategies”
2. Focus on specific areas that require improvement - To get the best out of your team it’s a good idea to pinpoint exactly what needs to be improved. If Sales are low and sales require quotes to be produced, then focus on driving improvements in the number of quotes put out. Monitor them and put KPI’s in place. Provide feedback and assistance to the Salesperson to make sure they are meeting their targets.
3. Help remove obstacles - To perform anywhere near top capacity, individuals may need help in removing obstacles. Managers and Business owners should be that “snowplough” that keeps the road clear for their staff to perform at top capacity. For example if a staff member was having trouble getting work done because their computer was slow or old; it may be time to upgrade it so they can work faster. Keep your eye open all the time for obstacles that could be holding back your team and remove them. People have improved motivation when they see you actively helping them do their job better.
4. Gain a commitment to Change - Unless you can get a commitment from a staff member to improve in any area, that member may not attain the higher performance. They must want to do it, and they should communicate that to you genuinely. There’s some skill to get an intuitive feel when employees are serious or not about performance improvement. Look out for clues like: over agreeing about the need to change and agreeing to change without any emotion. These may be hints that they aren’t genuine about it.
5. Applaud good results - Always praise people when they’ve made their targets or gained that improvement no matter how small. There’s nothing like genuine encouragement and positive reinforcement especially in front of their peers to make them feel good about what they have achieved. Managers often forget this important facet of their role. Enforce that encouragement with a small gift like movie tickets or a book, because this makes them feel good about the achievement for longer, and gives them the opportunity to tell their family and friends about it.

So there you have it ...- Five ways to improve productivity in your team.

Steve Eastwood
Small Fish Business Coaching Melbourne
www.smallfish.com.au

How Much Profit Is Your Business Leaking?

Most businesses leak profit, often for simple reasons, which can easily be fixed. Is your business leaking profit?

The Business Audit Consultancy will help you identify and plug profit leaks. And help you make more money. And who doesn't want that?

Just ask Noven Purnell-Webb from Magedata – he says

"The questionnaire was a really easy way to get some quick and effective insights into how my business is running. By merely asking the questions, the obvious things can no longer be ignored and some surprising results emerged. A highly effective tool for any business owner trying to clear up the bigger picture."

Click below to read more or to book yourself in for a good probing (with questions of course). We think you’ll like it.

Read More Now >>>

Regards,
The Small Fish Team

Creative Problem Solving

“Thank you for calling the Creative Business Seminars.... If you would like to become more creative ............Press 1 without touching your handset!”

A cartoon by Randy Glasbergen caught my eye this weekend and it got me thinking – just what makes one person more creative in solving problems than another? Are there techniques that can be used by normally non-creative people (such as myself) to make them more creative?

After all, businesses are always talking about being more creative: 10 new Creative marketing strategies, 7 Creative selling techniques to name a few that do the rounds. (By the way- just for the record - Small Fish does not endorse creative tax minimising strategies in case you were thinking that).

Anyway, it seems being creative isn’t just about finding creative solutions to problems. It seems there’s more to it than that, like for instance starting off by understanding the problem in different ways.

I heard it once said...pretend the problem is a jigsaw puzzle. Now break it up and turn over the pieces in your hands. Look at them again and again...what do you see? Straight edges, corners, middle pieces?? Reds together, greens and blues...I’m sure you get the idea. By looking at the problem from different angles you discover unique solutions from a different perspective.

Another writer suggested using creative “jamming”, like a jazz group. Jamming entails giving the problem to a group of people and getting them to give it a good “working over”. Pass it around, tear it apart, put it back together, and turn it over again and so on. The group often sees more than the individual.

Another way is to “tell a stranger” ... This entails describing the facts and situation to someone not related to the problem. Get them to explore the problem with you and get them to ask you questions. By verbalising the problem, putting it in your own words, you are more likely to view the problem differently, and this opens up creative solutions.

So there you have it – if you have a business problem you’ve been struggling with, GET CREATIVE with it....and of course you could always get your business coach to help you.

Steve Eastwood
Small Fish Business Coaching Melbourne
www.smallfish.com.au

9 Ways to Improve Your Sales - A Lesson from Beaurepaires

With small business doing it tough these days it pays to get back to the basics.

Here’s how I was given a lesson on marketing, sales and a touch of classy customer service this week by Beaurepaires Burwood.

It started with a thought...and ended in 4 new tyres.

I decided since I had an hour free I would get a quote for new tyres for my car before a well meaning member of the Victoria police decided they would force the issue by adding to the state coffers. It’s one of those jobs you keep putting off because ....well.... you know it’s going to hurt the hip pocket.

In my local area I have two main tyre suppliers just a block away from each other, so off I went to get two quotes (as you do).

I remembered a while ago my wife had taken her car in to the local Beaurepairs for a simple puncture repair (a $20 sale) and they were really helpful so my first thought was to call in there – after all there was a bit of a relationship already.

Lesson 1: Be excellent on even tiny sales -you never know where they may go and they start your business relationships.

I pulled into Beaurepaires Burwood store. Great location – right on the corner with space to park in the driveway.

Lesson 2: Make sure you are where your customers can easily find you.

Walking in to the shop I was greeted by two smiling shop assistants who were busy on the computer at the time but quickly stopped what they were doing and stood up to see to me.

“A quote? No problem, let me out come and have a look”. Anthony quickly diagnosed what I already knew.... 4 new tyres all round.

Lesson 3: Focus on the customer – they are the most important person in the store at the time.

I explained that the tyres I had on the car seemed very hard and was that normal? Straight away he took me over to a pile of tyres and pulled one down off the shelf and pointed out the features of how great they were. – “These have just come off the truck -here.....feel they have a soft lining – these will be great on your car and fix the hardness problem."

Lesson 4: Know your product, listen to your customer, and provide a SOLUTION and let them feel like them own it.

“No problem, sounds good– but how much?”. I was still in the “I want a quote” mode.

“Well today we just happen to have a Buy 4 -get 1 free that’s 25% off so I can do a really good deal for you”.

Lesson 5: Make the price attractive (not cheap – these are $250 tyres here!) the customer must perceive it to be value for money.

“And – I can fit them today! Can you leave your car with us?”. Anthony even offered to drop my keys in the letterbox because I wasn’t sure if I would be able to pick the car up before closing time. How good was that? Anthony certainly wasn’t going to let me go off and get that second quote.

Lesson 6: Make it easy for your customer to do business with you.

So there I was standing in the shop with all the barriers to buying removed and a fantastic offer on the table. What else could I say?

Wait... there’s more:-

“And by the way – for an extra $7.50 a tyre we can give you extra protection so if any tyre is destroyed or damaged during its lifetime for any reason we’ll replace if free. (Conditions apply I’m sure).

“Great! - I’ll take that”....

Lesson 7: Upsell Upsell!!- If the margin on a $250 tyre was say 30% (I’m guessing here) the profit would have been $75.00. By getting an extra $7.50 out of me per tyre with no extra cost to the business the profit suddenly became $82.50. Now the gross margin is 33%!!! Straight to the bottom line!

I am pleased to report I am extremely happy with my new tyres and marvel at the way the whole transaction was handled. Well done Beaurepaires Burwood, here are the 9 things I learned from your business this week.

1. Start your business relationships early no matter how small

2. Position yourself where your customers can find you

3. Focus on your customer, they are your most valuable asset at the time

4. Know your products features and benefits

5. Listen to your customer’s pain points and provide SOLUTIONS to them

6. Help your customer feel like they already own your product before they buy

7. Make it easy for you customer to deal with you

8. Find something you can add to the sale without adding to your cost

9. Provide excellent customer service

A real life lesson written by:

Steve Eastwood
Small Fish Business Coaching Melbourne
www.smallfish.com.au

Somethings Fishy at the MyBiz Expo in Melbourne

If you’re going to be in Melbourne on Thursday 16th or Friday 17th June, you can meet some of the Small Fish team in person at the MyBiz Expo.

The Expo promises to be a fantastic networking event, with the opportunity to meet many people and gather some valuable and useful information that can help you in your business.

We would love the opportunity to meet with you too, to talk about your business. Could your business be more profitable? Is your business and the environment it operates within changing? Does the business leave you with enough time to enjoy your success? Are you in control of your business, or is it the other way around?

Speaking with a business coach in person is a great way to discuss these things, and to find out whether a business coach might be able to benefit you and your business.

Alternatively, you might be considering becoming a business coach yourself. Being a business coach is not for everyone. It is hard work, but very rewarding as you get to work with and help a broad range of people in business.

Come down and talk with the team to find out first-hand what being a business coach is all about. This is also a fantastic opportunity to discover the benefits joining forces with Small Fish!

The MyBiz Expo is being held at the Melbourne Convention Exhibition Centre from Thursday 16th to Friday 17th June, and Small Fish will be at Stand 30. To find out more, and to preregister, click here.

Regards from The Small Fish Business Coaching Team

Zappos - Going to Extremes for customers!!!

I read a great article recently by the CEO of Zappos' Tony Hsieh on how they go that extra mile for their customers and that has resulted in phenomenal growth - from $184m in 2004 to over $1Billion turnover in 2009!!!

From humble beginnings in 1999, when Tony Hsieh invested $500,000 in what was universally considered a bad idea at the time: an online shoe store, Zappos quickly became the leading online apparel and footwear provider by striving to provide shoppers with the best possible service and selection. They offer millions of products from over 1000 different brands of clothing and shoes and are now owned by Amazon who bought them in 2009 for $1.2billion.

In 2004 they moved their entire workforce of 70 staff from San Francisco to Las Vegas to make use of the 24/7 customer service mentality and culture where people are used to thinking of customers as guests. It certainly paid off and was a great strategic decision.

They champion the telephone as one of the best branding devices they have – far better than social media and “integration marketing” – Tony says “you get the customers undivided attention for 5 – 10 minutes and if you get the interaction right they remember it for a long time and tell their friends about it.

How did they do it?

• They make customers count and achieve exceptional customer service!!!

• Make customer service a priority throughout the WHOLE company – not just a department

• Empower employees – don’t let them have to escalate a problem to their supervisors

• Fire customers who are insatiable.... yes we all have them!

• Don’t measure call times and don’t use sales scripts – be yourself

• Don’t hide your phone number – you WANT to talk to customers

• View customer complaints as an investment – not an expense

• Celebrate great service by telling exceptional stories to the entire company

Great pointers we can all use in our businesses... and if we do it well we might also get $1.2billion for ours?

Reference: “How I did it.. Zappos CEO on Going to Extremes for customers”

Steve Eastwood
Small Fish Business Coaching Melbourne
www.smallfish.com.au

Happy Workers are Productive Workers

The notion that “happy workers are productive workers” seems obvious at first but was developed over 70 years ago in the 1930’s and 40s by researchers conducting the Hawthorne studies in Western Electrics. It was an interesting and revolutionary experiment at the time to determine if production in a factory changed under high or low light intensities or by using different light sources over work places.

They found was that production had very little to do with light type or intensity at all!!!– they concluded that all working teams improved production simply due to the motivational effect of the interest being shown in them. This became known as the “Hawthorne Effect”.

Based on those conclusions, managers worked to make their workers happy by improving working conditions and the environment in which they work.

The reverse may also be true... productive workers are more likely to be happy workers. Why? Well - productivity leads to job satisfaction. If staff do a good job they intrinsically feel good about it. This increased productivity is likely to lead to higher wages, increased recognition and possibility of promotion. These rewards in turn increase job satisfaction.

Creating a great working environment, with supportive working conditions and providing mentally challenging work will contribute to having happy workers. Studies show workers prefer physical surroundings that are not dangerous or uncomfortable. They also like working relatively close to home, in clean and relatively modern conditions with adequate tools and equipment to do a challenging job.

Business owners should take note because higher job satisfaction leads to a decrease in absenteeism and lower rates of staff turnover– great profit drivers in any business!!!

Steve Eastwood
Small Fish Business Coaching Melbourne
www.smallfish.com.au