How To Get Unstuck: Barriers To Entry Edition

Worried about the obstacles that you’re facing in your business? Odds are those obstacles are the result of not understanding the barriers to entry your business faces - even if you’ve been in business for while. 
 
“Barriers to entry” are way more than business buzzwords that fumble out of the mouths of people playing business. In fact the concept of “barriers to entry” is applicable to more than just starting a new business venture. The last time you probably heard that term was in an economics class in either high school/college or if you’ve talked to me long enough and have listened to my opinions about a few big public businesses. 
 
At the very least, that makes my competitive strategy heart sad.
 
No need to panic though because in this post we are going to talk about why it’s important to think about the barriers of entry and exit in your industry or business and how that can help give you a bit of an advantage. Competitive advantage is not static - you have to keep working at it! 
 
One more quick thing. To all the naysayers out there pining over why their businesses aren’t growing - the pie is not too small. There is enough marketshare to go around for everyone if what you’re offering is valuable! 
 
Especially, those that effectively differentiate, understand their barriers and pick the right niche. So before I start getting push-back on how strategy is just a mental exercise and that it takes big bucks to use strategy effectively just remember that if you can get your business to be laser focused, you’ll always find a rabid and engaged customers.
 
Ok prerequisite rant over.
 
So a barrier to entry is simply defined as a thing you need to do to get your business up and running. Barriers can also be reasons why customers aren’t buying from you. It can be an action, a purchase, government regulations or even experience needed to get you into an industry or to get customers to engage with you. Some industries are more capital intensive than others - think the capital requirements of a car manufacturing company versus the capital requirements of an english tutor. 
 
The other side of that pendulum are industries that require lots of experience or education. Think of the time and experience it takes to be a great doctor and attorney versus more entry level jobs.  Some firms attempt to capitalize on a specific barrier to control what firms can get into their market or industry. They may control the raw materials, contract with wholesalers or distributors, pay big lobbyist dollars to keep regulation in their favor or even control all the media outlets to keep you from advertising.
 
That doesn’t mean you shouldn’t compete especially if it’s what you are passionate about! You just have to figure out how you can differentiate and deliver on the things that make your product or service special.
 
Barriers to entry tend to me a muddled mess sometimes. Start-ups and veteran businesses can stretch themselves too thin when trying to figure out which ones are most mission critical to focus on or to try to create a competitive advantage. Here are a few I like to keep in mind, that are more focused on how you run your business, when I’m thinking about keeping a business competitive in terms of barriers.

  • Network Effects - Think about the communities your stakeholders have created in support of each other and your brand. This can be a huge intangible asset.
  • Proprietary Processes - This is your firm's secret sauce. Do you do something in such a special way that has your clients and customers resonating with not only the result but how you bring that result to them. I have a favorite coffee place and it’s not because the coffee is great but because the coffee servers are great to talk to.
  • Switching Costs -  Cell phone companies are amazing and notorious for this all at the same time. Locking customers into contracts creates a barrier for new entrants or at the very least creates a lag time before groups of potential clients or customers can be reached.

These absolutely apply to customer's willingness and ability to engage with you. Are you making it easy for them to buy from you? To connect with your story or brand? To understand why you are so valuable that they would be doing themselves a disservice by not using you? 
 
Barriers to exit are very similar to entry. Some firms might choose not to play in a certain industry because it would be to hard to exit quickly or smoothly. It can be a challenge to offload plant, capital or equipment when a business closes. Firms might have high financial obligations to their employees might be locked into contracts with their suppliers.
When you are thinking about working on your competitive strategy I wouldn’t sleep on barriers. Better yet I challenge you to take a shot at drilling down into the three that I listed. Can you figure out where your advantage can come from and how you can better differentiate yourself. The biggest takeaway is sorting through all the noise when people talk about barriers to entry. Spreading yourself too thin can tax your resources and your spirit.
 
I would love to hear how you are navigating your barriers to entry? Do you have any insights or questions? My goal is to keep the conversation going and to really get entrepreneurs more in tune with what’s going on around their businesses and not just what’s happening in them. 

6 Actions To Help You Build Momentum In Your Business

“The essence of strategy is choosing what not to do.” - Michael Porter
 
There is no better way to start this post or a Monday morning than with a with a quote from famed Harvard Business Professor and Strategist, Michael Porter. This is a great quote because it applies to established or more mature businesses that are focusing on allocating resources for the week at a macro level as well as to the new solo entrepreneur who is firing up GMail for the first time Monday morning and trying to decide which thread needs responding to first. 
 
Short (and most likely true) answer is none of them. 
 
#MondayMotivation
 
Monday mornings are my favorite time of the week and here’s why. They are great for setting intentions, making plans and getting your desk ready for all the epic activity that’s going to come. Monday’s also provide the interesting opportunity to decide what not to do. Choosing what not to do is important because, regardless of the size of your business, it forces you to decide on the most mission critical actions that will move the needle forward in your business. We all have constraints that we are dealing with so making deliberate choices around how you allocate resources in any given day, week or quarter is important. Long term winging-it is always a losing strategy.  It also helps to keep you from diluting what makes your brand special by trying to be too many things to too many people. 
 
I’m sure you wouldn’t have to think long and hard to find enough work to fill a 100 hour work week. But, would all of those 100 hours be efficient? Value-adding? Activities that will support the direct growth of your business? Or, would you be playing in your CRM trying to decide the perfect amount of data fields when you don’t have any data to input yet be what’s going to drive more people into your pipelines and dollars through the door?
 
Probably not. 
 
Don’t get me wrong, I appreciate a tidy and well managed customer relationship management system as much as the next sales driven professional but at some point the diminishing marginal utility on your administrative activities will catch up with you. 
 
With today’s post I want to offer you six actions you can take right now to start building momentum on the week and to help you decide which actions are worth the investment towards making this week count. 

1. Close on something. 
 
You don’t have to be in sales to finalize a deal or a sale. Before you hit full on Monday triage mode after an inbox ignored through the weekend take a look at your to-do list. Is there a conversation that needs to happen, an order that needs to be filled, a proposal to be followed up with? Sealing any deal helps to start to build momentum and honestly feels pretty good! 
 
2. Rearrange your tasks.
 
Front-loading your responsibilities with all the easy stuff can actually be a negative thing because you are eventually dreading doing the not-so-easy stuff later. You’ll start to procrastinate and get distracted. Moving your lists around and reordering them in a way that mixes the heavy and the light lifting will also help keep you motivated and moving through the rest of the day. 
 
3. Stop focusing on Inbox Zero. 
 
I can honestly say that for a while I was little obsessed with my email inbox. (I think a part of me still is but, it’s that part is getting smaller by the day). While effectively communicating is crucial to help you start to the week of with a bang it’s not going to magically make you more successful - and it’s a distraction. Streamline your notifications so that you aren’t getting texts, app updates, desktop alerts, or any other notifications and focus on the important stuff in Actions 1 and 2 above. I’m not saying ignore your inbox but I am saying learn to identify the stuff that needs an immediate response from everything else. (No, not everything needs an immediate response!)
 
4. Take on a new project or two. 
 
Everyone is busy or at least they think they’re busy. You are no exception. Saying yes to help out with a project or taking on a new project can help set your productivity gears in motion. Doing this accomplishes a few things: you are continuing to prove your value as a resource to the people you serve and you will have to deliberately allocate the scarcity of your time a little smarter. Showing colleagues, co-workers, clients, etc. that you can be counted on and that you are willing to jump into something new always has the potential to create new opportunities for success. 
 
5. Get your prep-work done! 
 
Just because you have a meeting on Wednesday doesn't mean that you should wait until Wednesday morning to prepare for it. That’s what everyone else is going to be doing. If you have some time today do it now. The work you do today will be more researched and prepared than anything you might rush to come up with - no you don’t work “better” under pressure. It will also help take some pressure off of your task lists and schedule. If you haven’t already, working to shift your mindset to one of investing time and not spending it will start to pay off immediately. Better prepared means more efficient, more professional, and a better chance for you to be recognized for being awesome by not wasting people’s (boss’/client’s/stakeholder’s) time. 
 
6. Read something.

If all else fails today make sure you take some time to work on bettering yourself. It can be professionally, intellectually, emotionally, or even spiritually. Invest some time in learning a new skill or sharpening ones that will help you create the week that you want for yourself. If you are an entrepreneur take some time to work on the parts of running a business that you might not be too strong in. I find that happens a lot with regards to getting the most out of a small business's financials. There are tools and websites that are all about helping you grow as a professional - this blog included! 
 
Hope these six actions help you drill down and figure out what’s not worth doing. As a business builder and grower your primary responsibility is to deliver the best experience possible to your customers and then after that it’s to figure out the work that will best bring in more of those customers. When you’re firing on the most important cylinders doing good work for great people it won’t be hard to build up a little momentum. 

If You Want Business Growth You Need Accountability

Transcript:

Hi everyone! I’m Nunzio and you’re watching Manager Minutes: Episode 3. In this series it’s my goal to help you close the gap between what you planned to do to grow your business and what you’re actually doing in the business - in 5 minutes or less..
 
In this episode I want to cover accountability and how I’ve been seeing a lack of it lately.
 
If you’re trying to grow your business you need to be accountable for your actions. If you’re expecting success I can tell you that it WILL NOT come unless there’s some kind of activity attached to it. You can’t keep blaming your setbacks and false starts to externalities. It’s not the world’s job to remind you how to run your business. 
 
No one owes you attention. No one owes you referrals and no one owes you success. 
 
You have to put your big boy or big girl plants on and decide if what you’re doing is worth your continued efforts. You also have to decide if you actually care about the goals you set for yourself.
 
If deep down in your squishy bits the goals you have on paper aren’t really the things that motivate you then you’ll never be able to hold yourself accountable. 
 
My challenge for you today is to look for sources of feedback in your business. Are there things that are happening or not happening that you can draw some kind of inference from. If stuff is going how you planned and your response is just posting all kinds of success quotes all over social media then you need to stop - and get to doing more of the work that matters. Look for the levers that you can push or pull that will support you working towards some kind of goal. 
 
Moral of the story here is to strengthen your accountability you have to start doing (and measuring) the work you keep telling people you’re doing. 
 
I’m Nunzio you’ve just finished Manger Minutes: Episode 3 and I’ll see you in the next one.

Make The Second Half Of The Year Count!

Today I want to just jump right in and talk about the mid year review process. It’s the middle of June which makes it an excellent time to hit the pause button on your business activity to take a look at what’s going on inside your business. 
 
I want to talk about why that’s important and give a few tips and actions you can take and try out in your business. 
 
Let’s start not in the middle but at the beginning of the year. 
 
At the end of every year you hear all kinds of stuff about setting resolutions, getting your annual plans, budgets and setting your business strategy for the year. It’s all rally cries and 4 hour strategic planning retreat or exercises. 
 
That’s all good stuff because for a short time you are forcing yourself to get crystal clear about what you want and how you’re going to get it. At least in an idea generating-optimal resource allocation-best case scenario planning kind of way. 
 
But, unfortunately, like well intentioned weight loss resolutions, after a few weeks, most businesses fall off the resolution wagon. Falling off your over idealized business resolution bandwagon doesn’t have to be a bad thing though. 
 
See, strategy and plans need to be more fluid. The trap is that as soon as you get in the flow of doing your business there are lots of pressures that a business owner has to deal with, that maybe weren’t accounted for or aren’t included in any of that early planning. If you built a rigid plan with maybe a few unreasonable or unrealistic expectations, there’s a chance that you get a little discouraged and throw the strategic planning baby out with the bath water. 
 
That’s when most businesses chalk up that whole process as not being worth it and validate how they feel by claiming that quote, this stuff doesn’t work or all that advice sounds great for everyone else but not for MY business end quote. 
 
That makes my heart sad. 
 
All that resolution and early year planning work is important for a lot reasons. They are the same reasons why they are important in the middle of year as well. 
 
Reasons like: 
 
Taking stock of what you’ve accomplished to date and look for constructive feedback on areas where performance is lacking. 

Discovering and eliminating possible roadblocks that are keeping you from achieving your goals.

Adjusting goals because people's tastes and expectations can change over time.

Getting information from you clients or customers about their satisfaction.
 
Making sure in the course of doing business you’re honoring what’s important to you - those would be your mission and values.

And, last on my abbreviated list here is making sure that you’re getting the most out of your time, money, emotional energy, patience and the list can literally go on in terms of the resources your business needs to thrive. 
 
I think you get the point. What happens is during the year we get busy. Get busy trying to do all the important things that help keep the people that we serve happy and returning as customers. But that leaves room for unclear strategy to creep in. Unclear strategy and conflicting priorities reduce your business’ performance and profits. 
 
That’s no bueno. 
 
So here is a list of 3 actions you can take during your mid year review process to help get your business back on the tracks you laid back in January. 
 
Gather your data. Every business has data. It might be a little different but start gathering. Start putting together things like client/customer sales, how many times you engage with customers, how many times do you have to engage with a prospect before they make a decision, how are you measuring success with things like social media or other marketing channels, what are all the steps in your process from customer interest to close, how much time are you spending doing admin stuff, or networking?
 
I’m hoping you get the idea. Then once you have all that in front of you and in some kind of way that makes sense you can make your way through some of the bigger questions about your business. 
 
Start with the big questions like: 

Where are we?

What do we have to work with?
 
Where do we want to be?

How do we get there?
 
What you’re trying to suss out are the mechanics of your business. If this were that weight loss new years resolution review what you want is to see how your body is doing now compared to the beginning of the year and have you been doing what you said you were. Then whether you were or not take a look at what’s happening right now and try to work out how you can still get to success if you’re a little short or if you are blowing your fitness out of the water what’s the next set of goals you can work to. 
 
After the mechanics I want to get into the experiences. 
 
A very important part of the review process is getting clear on what you want the people who interact with you to experience. They can be the same or different for all the different kinds of people your business interacts with. Everyone you meet is not necessarily someone that will listen to your pitch and you have to be comfortable with that. At the same time though you want to make sure that whoever your audience happens to be at the moment when they walk away, you did your best to be authentic in terms of your mission and values. This is getting at the heart of what’s important to you. 
 
In terms of our weight loss goal again, it’s like if you were using one of the many MLM weight lossy kind of products and all you did was spam social media asking people to buy or plan some kind of party. If taking your fitness more seriously has transformed what you want to do to reflect helping other people embrace their fitness is spamming <insert mass marketing weight loss gimmick> really the best way to get that conversation going. Probably not and if you’re like me you’ve already muted a few friends that have done that. Sorry friends muted friends if you’re listening. 
 
This last piece is about digging deeper on the “How” question from the first part. What you need to wipe from vocabulary from this point are vague business success generalities like: Make more sales, get more customers, have more engagement, set more meetings, coach more clients, make more stuff. 
 
Get the idea? 
 
Move away from the generalities and start quantifying what success looks like. How many more sales do you want? How many more customers? What kind of engagement? How many more meetings? How many more coaching clients? How much more stuff are you making? 
 
Once you get specific you can start to break out your schedule and allocate the time or other resources you need to allocate to hit those goals. You should have an idea because you already did the work of pulling the data. It might be more than finding the groove in your schedule. WHen you are looking at your business, you need to get clear and incremental on the actions you need to take. 
 
I mean, if you were a client of mine and said ok my goal is to get 30 new customers this year I’d say great so what are the steps you think you need to take to get the next client? That’s how you start. If you make your way through enough next’s you’ll be able to make your process a little more streamlined every time and figure out the tricky little things that work and tease out the things that aren't working so well. 
 
That’s it! That’s your review process for the month of June. You didn’t have to start from scratch and hopefully you're just building on the momentum you’ve been growing from the start of the year. I hope that the reasons I’ve listed are compelling enough to help you work through the three steps of getting your data and answering the big q’s, then working on the experiences you want to create, and lastly getting granular on the work that needs to be done to finish the year successfully, however you define success. 
 
I’ve just finished this process for myself and realized that success for me has changed a bit and that’s not a bad thing. My personal review process has shown me how I can take what I’m working with and authentically use my strengths and resources to finish the year strong. 

Manager Minutes Episode 2: How To Set Better Goals

The second episode is live! This is exciting because I'm already working on small changes to make this a better experience for both of us. 

Transcript:

Hi everyone! I’m Nunzio and you’re watching Manager Minutes: Episode 2. In this series it’s my goal to help you close the gap between what you planned to do to grow your business and what you’re actually doing in the business.
 
In this episode I want to highlight three things that will help you set better goals. 
 
Let’s start with measurable. When you are working on setting goals it’s really important that your outcome, effort and action be quantifiable. You want to be able to look down at your progress at any given time and know exactly where you are, what’s working, what’s not and what needs to be done. 
 
Next is actionable. It’s awesome that you want to do more, be more or make more but “more” is not a real action. When setting goals that you are serious about achieving you can’t treat your actionable items like bullet points on a bad resume. So get specific and quantify the action you want to take on a daily, weekly, monthly or any other time interval basis. 
 
Lastly is making sure that your goals are realistic. If you aren’t honest with yourself about the time you have to commit to your goal or the work that needs to be done then your goal will just sit on a list somewhere. Your goal should challenge you but it needs to also be rooted in common sense. So ask yourself, based on my current situation, ability and constraints can I stretch myself a bit and still make good on this goal. 
 
However you are planning goals right now I hope that you’ll pay a little more attention to making sure they are really measurable, actionable and realistic. 
 
I’m Nunzio you’ve just finished The Manger Minute: Episode 2 and I’ll see you in the next one.

Manager Minutes Episode 1: How To Set Better Priorities

Welcome to the first episode of Manager Minutes! I've decided to take the leap and start learning my way through producing video content. On this journey it's my hope to continually up the production value and deliver content that you can put into action every day. Below each video I'll always do my best to also include a transcript or show notes for you too. 

Transcript: 

Hi everyone! I’m Nunzio and you’re watching Manager Minutes: Episode 1. In this series it’s my goal to help you close the gap between what you planned to do to grow your business and what you’re actually doing in the business.

For this first episode I want to call your time management skills out. Well, actually my goal for this video is to supercharge those skills by giving you one simple things to remember when you’re trying to decide what to do next in your business.

And that's priorities.

You need to  get to the heart of what's important in your business. Before that though you have to come to the realization that you’re never going to get everything on your To-Do list done...ever.

What you can do right now is decide on the most important 1 or 2 things that you need to get done each day and build the rest of your supporting tasks around those.

I already hear you asking, How do you decide on what's a priority when everything I do is important in my business??

Well person who abuses #hustle in all your social posts there are two questions you can ask if your tasks:

1 Is what I need to do directly impacting the value I'm delivering to my customers?

And.

2 Is what I need to do directly getting me closer to one of my goals?

A yes answer to either one of those questions means you have a priority on your hands and that you should probably be filling the rest of your To-Do list with supporting tasks for your new priority.

So figure out what matters most and get to doing the work that matters most in your business.

I’m Nunzio you’ve just finished The Manger Minute: Episode 1 and I’ll see you in the next one.

Stop Consuming Motivation And Start Mining For It!

Motivation is an interesting concept. 

It has the potential to refill your entrepreneurial gas tank allowing you to crush your to-do list and at the same time; the acts of hunting for and consuming motivation related materials can literally cripple your productivity. 

What I’d like to explore today is how you can use motivation to push your business forward. It’s not the Tony Robbins or Gary Vaynerchuk kind of motivation that I want to explore though. The motivation I’m talking about is getting to intimately understand what motivates the people you’re trying to get to listen to your message. 

A critical and fundamental concept you need to understand as you’re growing your business is getting to the heart of what motivates the people you’re trying to serve. 

Before we start I need to potentially call you out. (Sorry in advance.) I need to call out the people who are a different person when they are trying to get some kind of engagement out of their audience. Different from their normal everyday, walking through life buying stuff kind of person that we ALL are. I need to call out all the people that have and share all kinds of tips, tricks and tactics for growing a business but never actually do any of those things themselves. It’s like saying, “Having clearly articulated goals are really important but, I’m a better operator when I just wing it.” They are the people that binge watch/listen to business development stuff but never take any action...and then complain about the externalities that are working against them when they get zero traction. 

What?! 

This is one of the problems with motivation. You expect consuming some soundbite driven piece of content to magically change you into a super-productive-business-building machine. That might work for a few people that need a push on an off day because they already put in the time to build real business infrastructure. If you’re the “entrepreneur” that’s been waiting to start for three years, one more podcast isn’t going to be the thing to push you into launch mode. 

For the love HubSpot, it’s not the economy’s fault! 

So, let’s approach motivation from a different angle. Let’s turn motivation into an asset that you can deploy strategically to support you building your business. In order to turn this consumable into a value-add for you we have to define motivation. 

Motivation’s New Definition: Benefits offered, earned or granted to help someone in their decision making process. It’s an incentive that is offered to encourage someone to take action. 

Sounds basic but sometimes revisiting the fundamentals is how you get better.  So, now that we are on the same page let’s talk about what you can do to better understand what motivates the people you’re trying to serve, to take action. I have a few questions you should think about when you’re trying to get to the heart of what motivates people. There’s also a point you should avoid as it can be a false-indicator for a lot of people. 

1. Where are they already spending their time online? 

When you observe your potential customers spending time on social and streaming platforms what do you do? They are clearly willing to accept the benefits of consuming some type of online media and chasing some kind of feeling in exchange for the finite minutes they have in any given day. If you’re trying to get into the headspace of your market, figure out where they are going online, what they are consuming and how they are engaging each other. If you can get to the heart of why they are chasing a quick dopamine hit from binge watching another episode of the Flash instead of buying from you, you can start to work on making your value proposition a little more interesting. 

2. What are they most proud of? 

Being proud of your kids, a DIY craft project you just finished or the website you built can tell a lot about what motivates you. We are in a market where the default for a lot of people is to over-share. You can use this to your advantage. Pay attention to the feelings and outcomes your prospects share when they tell you a story about a time they were most proud recently. You’ll be able to infer what outcome or value-delivering switches need to be manipulated to deliver a must-have experience to your customers. Big shiny new purchases might signify a preference for seeking high-end consumables, high quality products or getting great deals. If someone tells you in painstakingly proud detail all about how little Jimmy learned how to ride his bike without training wheels and proud-papa insists you watch all 30 minutes of the video he shot on his phone, quality family time might be something important. 

3. What does their life look like? 

Scanning the landscape of your ideal customer’s life can provide you with a lot of insight. As consumers we make decisions everyday that to us, feel inconsequentially when looked at individually but, summed up can tell a lot about what motivates us. If you’re marketing savvy this is the part where you start to build up the demographic profile of your ideal customer. Ages, neighborhoods, employers, favorite brands, celebrity crushes - all these things (and more) can offer you insight on how your ideal customer makes their decisions and the values they truly hold dear. 

Those three questions are a good start and if you start to really dig into each of them you’ll be able to collect a ton of data about your ideal customer. There is one thing that I want you to look out for though and it goes back to what I said early around the disconnect between people say they are and what they actually do. 

Be wary of taking things like social profile one-liners for granted. Be wary of any singular piece of information you collect, actually. When you’re trolling through a seemingly endless sea of available data on people, you can’t let a singular piece of information carry a significant amount of weight. What you’re really looking for are patterns in behavior and patterns for incentives. Just because a random social profile in what you believe is your ideal demographic says they love travel doesn’t mean they have ever actually traveled. Taking information on face value can be dangerous as you’re trying to craft your value proposition. 

Remember you’re trying to provide value and sell to real people, not the disconnected version of themselves they display online. 

So the next time you’re feeling a little behind get hydrated and avoid the urge to binge watch motivational videos on YouTube. Instead, roll up your sleeves and try to get a little deeper into the heads of your consumers - your business will thank you for it. 
 

5 Tips To Help You Narrow Your Market And Your Focus

Narrow.jpg

Happy Memorial Day Weekend! 

This weekend marks the unofficial start to summer and with any good season change it's also a good time to take stock in your business and do a little reflecting on your plans the next couple of months. To help you with that I'm going to share with you 5 questions you can use to help you build ideas and think through who exactly are the people you want to serve. 

"Well, I'm serving everyone that I can" - said the business owner who was so afraid of losing the sale they weren't thinking about authentically growing. 

Wanting to serve everyone is natural. If you felt that it was easy right out of the entrepreneurial gate to turn potential sales away then you are a really rare breed.

It doesn’t matter if you are a new business or have been around for a while there is always pressure to bend to the whims of the people that are willing and able to spend their money on us. The trick is to get really good at picking which of those whims to indulge and which to just let site in the suggestion box. 
 
In order to help you control constantly changing and adapting your brand around for what everyone wants one of the first things you need a handle on is deciding in which market your particular good or service is playing.

That’s not to say that you can’t grow beyond it, pivot away from it, or create new stuff entirely down the line. Getting narrow and specific about your market or your best target customer/experience will be crucial in accelerating your growth. Not to mention increase the rate of return on your time and capital investments. 
 
When you focus and get narrow on your market it gives you the opportunity to serve that market with a greater level of depth. You are working on building relationships and authority with your potential customers and on becoming a resource for them. When you niche down you also have the opportunity to better understand all the pieces of your own value chain - especially with what happens after the customer engages with you.

Here are 5 questions to help you narrow your focus:

1.) Of the people you serve the hardest are there any common factors that tie all of them together beyond the solution you provide? 

2.) Does your product or service address a pain point entirely or is what you offer part of a bigger solution? 

3.) How big is your market and is there room for realistic growth? 

4.) Are you differentiating against any competitors? Are there any core capabilities that give you an edge over them? 

5.) Do your stakeholders believe that you are an expert in your market? If not, how can you tweak your marketing to best communicate that to your customers in the best medium for them?
 
This list of 5 questions are important and hopefully hit you with a bit dose of “real”. When you are talking about identifying markets it can be easy to drift off into academic-exercise land and out of answering the questions that matter most.

Think about your business and these questions with the focus on narrowing your market so that you can dig deep and start growing. Move away from being a mile wide and an inch deep and into an inch wide and a mile deep - that’s where real connections and solutions get made.

 
 

How To Go From Business Casual To Business Growth

Let’s set the stage. 

It’s Monday (or any weekday morning or whenever the equivalent of “Monday” would be in your business). 

Today’s the day you’re taking things seriously. You woke up in your CEO pants and you have more determination now than you’ve had since you made your business growth-centric New Year’s Resolutions. 

You get to your desk, shake your mouse to wake your computer up, open up your inbox and a new tab in your browser and...just stare. In an instant all the thoughts you had about making today the most productive day you’ve ever experienced evaporate, like a dream you can almost remember after waking up. And, just like that your motivation takes a bit of hit and you fall back into your normal start of the work week routine. Or, worse is you have to deal with some fire that instantly bogards your plans for today. 

I can help get your business back on track today and any other day that you happen to wake up wearing your CEO pants. I’m going to introduce you to a few Lean principles that you don’t need a “belt” or certification to put into practice that can help keep you on track when you’re business (or motivation) feels like it’s running off the rails. 

Let’s start with a quick, non-business, definition of the Lean process. It’s basically just a set of ideas, principles and processes designed to help your business deliver the most value possible in a way that keeps your expenses (money, time, emotional capacity) as low as possible. It’s a way of thinking designed to help you more efficiently shape and organize how you’re getting to the goals you have for your business. 

Below I’m going to outline four concepts you can put into action right now. This could be especially useful for those of you that have been distracted by their inboxes and are running a little low on business growth momentum at the moment. 

1. Jump on the Continuous Improvement bandwagon.

Continuous improvement is definitely a concept that gets lots of lip service but ends up being one of those things that gets thought about but never really put into place. The heart of continuous improvement is:

1. Getting you to think about the opportunities you have in a project, 
2. Then working on how you might be able take advantage of those opportunities, 
3. Trying out those changes or actions,
4. And, reviewing how those changes or actions worked out for you. 

Here’s where you can change that. Schedule a chunk of time every week essentially creating a meeting with yourself that you CAN NOT cancel or reschedule to work on your projects. Working on the planning, evaluating and tracking of your highest value projects weekly will allow you to focus on the work that matters most and force you to make decisions about how you’re carving up your work week. The goal is to avoid just showing up and blindly working on whatever needs immediate attention or what you think you “should” be working on. Adding a little more structure and an extra lens or two to the work you’re doing in your business will also help you figure out if the goals and outcomes you’re working towards are authentically the right ones for you and your business. 

2. Decide how you want to compete in your market. 

Clearly defining strategy is the concept that business owners sweep under the rug the most. I know because I see it every week. Business owners trying to grow think that strategy is just an academic exercise. They believe it’s important but don’t have the time to really think about because they are busy running their business. Well if you want to be successful, defining your strategy can’t be an afterthought. An easy, do it right now, way to get to the heart of your business strategy is to think of your business in terms of what. The biggest what you should be deciding on is what are you doing to consistently set yourself apart from your competitors and still delivering on the value your customers expect from you. 

3. Make friends with Pareto. 

You’re probably a little too close to your processes. Your marketing processes, your financial processes and operations processes can be a lot to try to keep organized as you’re in grow-mode. I mean that in the most loving way possible. Being close to your business is usually a great thing because it means you have your finger on the pulse of everything it takes to move your business forward. It also means you can get a little nearsighted about your processes and will sometimes be unable to tell what’s wrong with them. The Pareto Principle can help you figure out what work really matters and which parts of your processes matter most when you apply it to the work you’re doing and the data you’re collecting. Essentially, the principle states that 80% of your outcomes will derive from 20% of the work that you’re doing. At first glance this is a little deflating if you’re asking yourself about the other 80% of the work you’re already doing. Try not to worry about that and instead invest in optimizing that 20% of work that’s producing your results and do more of that kind of work! 

4. Stop (or strive to stop) doing all the work yourself. 

As you’re peeling through your business data and are starting to enjoy the good feelings that come from better efficiency care of the Pareto Principle you’ll start to notice that it’s getting easier to repeat the work you’re doing daily. Taking the time to stabilize and document the processes you use everyday will help you move away from doing everything all by yourself. If you’re serious about growing your business you’re going to have to hand off some of the things you have made yourself responsible for so that you have more time to focus on growing. I know it’s tough right now if you’re a solopreneur or part of a small team but you have to start writing things down. Not only will it be helpful when you’re trying to track whether or not your activity is producing the outcomes you want for the business but it’ll save you lots of time when you decide to grow your workforce. At the very least it will save you time having to relearn some task that you may only do quarterly - like building a cheat sheet for yourself essentially. I’m working on a process right now to help me edit video faster so that I don’t get stuck toying with all the neat features in Adobe Premiere. 

This is a good place to end for this post and a great place for you to start working more efficiently in your business. Taking control of your time has more to do with growing your business than you initially thought. How can you give dedicated attention to customer development and marketing if you’re spending time doing work that only marginally benefits the business? And, for the love of Gary Vaynerchuk spending 100 hours a week working and #hustle’ing doesn’t mean anything if the work you’re doing isn’t directly delivering value or making it easier for you to deliver value to your end consumer. 
 

7 Things To Keep Track Of To Keep Your Business Growing

There’s a ton of stuff to keep track of when you’re trying to grow a business. Inputs, outputs, customers, time, investment, impact and the list goes on and on. How do you know what’s important to track and what’s not? What’s the difference between vanity metrics and the metrics that represent real dollars in your bank account? 

I have some tips to help you out and they all revolve around supporting the strategy your building for your business already. 

Having your strategy (essentially your why, what and how) together will help you manage and measure the effort you’re throwing into your business. There’s a catch though, business strategy, the instructions that you're constantly building and adjusting for your business comes in lots of flavors and sizes. 

On top of that there’s no single best approach that is always applicable for every situation and no single tool that fixes every problem or overcomes every challenge in your business. Which ultimately leads me to one of my BIGGEST pet peeves, when I hear “consultants” talk about a single process they run everyone through. 

Literally makes my skin crawl. 

I am a big fan of having a strategic toolbox to sift through to help the business owners I work with find resources that makes sense to them and create change that matters. It works because just like in real life when you have a specific problem with your car or house you (or someone you pay) reaches into a real tool box and pulls out the right tool for the job. In this post I’m going to outline some important metrics you should be keeping track of, these help you identify specific problems or opportunities. That way when you reach into your strategic tool box you have the right information to pick the right tool for your business growing job.

Why should you care?! 

The challenge for you as a busy business owner is to choose the right approach or tool to help you manage your business. Maybe you’re looking to create overarching guidelines in your business or you need to decide how you’re going to sell you to a particular customer. Maybe you’re somewhere in between the 30,000 foot view of your business and boots-on-the-floor action. At each one of those stages there might be a different tool to help you navigate the buffet of possible decisions you could make and track all the outcomes that are possible.

How do you know which one is for you at any given moment? 

You know based on the data you’re using. If you’re a savvy entrepreneur type you might better know the meat and potatoes of your business as metrics. If you don’t identify as with the sexy way entrepreneurs are portrayed in the media that’s ok too - this is also for you. 

Better data (or metrics) means that you can better scan through all your options and pick the advice and resources that will be the most helpful. Better data and metrics will also save you and your business lots of time and frustration if you’re working with any type of would-be “consultant” that might be trying to funnel you through some predetermined evidence-based system. 

PRO -TIP: Most peer reviewed, well documented and established strategic frameworks are evidence-based. 

Here are a list of 7 metrics you should be keeping track of in your business. These are not the only 7 you should be keeping track but it’s a good start if you’ve just been winging it for a while. It’s in identifying challenges or opportunities in any/some of these that should guide how you find solutions or resources to get the most out of the time and energy you’re putting into your business. 

I need to throw out this disclaimer before we get into these - If you’re not tracking these in any kind of real and quantifiable way (some might be a little fuzzy I know) then you will not get any value out of this! 

1. Gross Revenue 

This is the money that’s coming into your business. Tracking gross revenue weekly or monthly can help you keep track of how the return on your efforts as you’re out in the world making people’s lives better. It can also help you identify patterns in your customer's behavior, especially if there is some kind of seasonality to your business. 

2. Leads and Referrals

This one can be applied to you retail folk but it’s better suited for any kind of service business. Tracking your leads and referrals every week or month can be really helpful in identifying where your business is coming from. I am a big fan of doing the most important work and putting your most attentive energy into the places you know yield great results for you. I know resources are finite and I know you know what it feels like to have lots of lines in the water with nothing biting. Keeping track of where your leads and referrals are coming from will help you avoid sales and marketing burnout and find the resources to help you better leverage the places you know your best business comes from. 

3. Profit Per Customer/Sale

It blows my mind when I ask people what their profitability looks like per customer or sale and they stare blankly at me. Don’t be a blank-stare’er. You need to know how much profit you’re getting from each client or sale for so many reasons. A few of which include how you’re pricing your goodies, how much time or energy each transaction demands of you and how scalable your business is. If every time someone pays you for something you are winging it how can you expect to get better and build a sustainable business that will support the lifestyle you want? 

4. Cash or Operating Reserves

If you're small you might not have much cash but your biggest asset could be time. You still want to manage time just as you would any cash in your business. How are you spending your resources? Are you weighing any opportunity costs? Have a list of priorities in terms of what gets your attention or cash when you’re working? It’s ok if you don’t have answers to all of those questions right now. What’s not ok is not tracking where those resources are going and what the returns or outcomes are on any of those investments. Keep track of your cash it will help you manage any kind of seasonality you happen to uncover while you’re keeping an eye on your gross revenue. See what I did there? It’s all connected! 

5. Inventory or Client Turnover/Lifecycle 

This is a fun one. How long do your goodies usually stay on your shelves before they sell? If you sell anything every extra day something sits represents cash your business doesn’t have and the growing possibility that it might not sell/expire. You might not ever be as tight an inventory management ship as Wal-Mart but buying appropriately will help you from sinking cash into too much inventory. For my service kin out there the equivalent measure is capacity. How many people can you serve in any given day, week, or month? If you are charging a fixed fee for service you want to make sure you are doing the best job you can and moving those clients through your service pipeline so that you can free up space to take on new clients. The longer it takes you to deliver the longer it will be before your next paying customer steps up and engages with you. 

6. Market Share and Brand Equity 

These metrics can be a little fuzzy for some business owners. The goal here is for you to keep an eye on where your business is in relation to your competitors in your industry. If you can get census data or some kind of industry specific insight on where you place that’s great. It’s also ok if you can’t but, if you’re fighting to get people to walk through your doors (physical or digital) and spend money then you should evaluate your competitive landscape every once and awhile.  Don’t think you have competitors? I’m willing to call you out and challenge you. I challenge you to think about any feasible substitute someone might be able to spend their discretionary dollars on and achieve some kind of similar outcome, feeling or experience. 

7. Time To Market

How long does it take for something to go from being an idea in your brain to an actual saleable thing. Keeping an eye on Time To Market will give you an idea of efficient your operational processes are. If you’re like me then you probably have lots of projects that you get really excited about, start and then never finish. Measuring Time To Market will help you keep yourself from investing too much into projects like this and to help keep you focused on the things that matter in your business. Those are things like serving your existing customers and doing the work that gets you recognized in your market. 

Just because your business is small, or smaller than your competitors, that does not mean that you can overlook being analytical. Every week or month you should be sitting down, getting elbow deep in the data of your business and looking for trends. It’s in how the data of your business changes over time that you will be able to identify REAL opportunities and challenges.

It’s through your data that you can make decisions, take actions and actually track your outcomes. You’ll also be able to look for the right tools or resources to help you make the decisions you need to make to push your business forward. No generic or blanket approaches to address your business’ specific needs. Keeping track of metrics in your business also keeps you from just feeling helplessly stuck or worse throwing money at anyone that sounds like they might have a good idea on getting your business unstuck. 

Here Are 4 Things To Remember When You're Looking For New Office Space

New Lease.jpg

I’m sure at some point in your life you’ve heard the phrase, “If you build it, they will come.” It’s from a 1989 Kevin Costner movie called “Field of Dreams” and it’s totally relevant for today’s post. Odds are you’re like me and have never seen the movie in its entirety but, you’ve heard your dad/uncle/older brother say that quote more times than you can probably remember.

Most people use this quote when referencing building a new product or service in their business. It comes from the idea that if you can identify your customer's pain point and offer a solution then you’re chances at organic business success greatly improve. Maybe that’s the case every once in awhile but, if you’re an entrepreneur struggling to grow I can say that 99% of the time that saying is total bunk.

Real life is not a baseball diamond in the middle of a farm field where ghosts of players show up and everyone has a grand old time. In fact, if you’re building into a physical space hoping new customers will come you are in for, probabilistically, a world of hurt.

This is a problem that I see all the time. I see business builders getting really excited about their ideas and solutions jump into an over leveraged buildout hoping that a grand opening celebration will solve their cash flow issues.  Then, when it doesn’t, scramble to figure out how bills are going to get paid while trying to simultaneously drive more traffic through the doors. It’s a really tough situation to see and a tougher situation to be in if you're the business owner.

So, when do you know if jumping into a new space or investing a bunch of time and money into your current space is worth it?

By keeping these concepts in mind.

1.) Are you beating obscurity?

If you’re business wasn’t getting any attention before your new space why would jumping to a space change that? Odds are it won’t. Taking stock of your business’ audience and community is a great place to start. Are people showing up at your events? Interacting with you on social media? Leaving you great reviews and testimonials? Coming back as a paying customer on a regular basis? Being able to leverage a real and engaged community is going to be critical if you hope to see real bodies in your space when you open your doors.

2.) Do you have enough revenue to support a space?

There are some expenses that you have to make when you’re starting a business. Building a website, getting business cards possibly investing is some kind of inventory/customer management system all qualify. These expenses, while potentially significant, are all flexible in terms of when you choose to incur those expenses. You know what isn’t a flexible expense? A long term lease payment. Well, that and all the other fixed expenses that go with buying into a new physical space. If you’re just starting out, struggling to grow or have really inconsistent sales why would you commit to a long term expense? Using some credit to finance expansion is great only when you can, with some minimal level of certainty, predict what your revenue is going to look like in the future. And no, just because your five year plan says you’ll be profitable in six months doesn’t mean the market you’re serving thinks the same thing.

3.) Will your customer’s tastes and expectations be changing any time soon?

Opening the doors on your shiny new business space is a great feeling. The fact that that your customers are walking through your doors,  engaging with you, buying from you and walking out getting the solution you’re offering them is why you chased the entrepreneur feelings in the first place. Will those feelings last though? How much research have you done on the disruption that could be happening in your market space? Can reasonably expect consumers to maintain their buying habits for at least as long as you have your lease? Transportation and medical aren’t the only industries that are subject to disruption anymore. Everyone knows the story of Uber and AirBNB but have you seriously thought about what disruption would like for your business? Before jumping into your new space or signing the dotted line on that renovation loan it’s really important that you try to take the temperature on how people consume similar products or services.

4.) Fit vs Opportunity

Opportunity is a tricky beast, especially when it comes to real estate decisions. Before you jump in a new space because it feels like fate dropped the space into your lap you need to think through a few questions. First, is this really the best space for you? Will being in this space make it easier for your current and potential customers to interact with you? Will the space be able to grow with you? At it’s core though this is the old “right vs right now” dilemma and the weighing of the costs/benefits of being in whatever space you’re thinking about. How you navigate this dilemma really comes down to making sure that the decision reflects the heart of your business as well as the financial needs that go along with financing your aspiring growth. The best thing you can do for yourself is to remove the emotional component of the fit and create a checklist of “must haves” for the space. That way, no matter how serendipitous something feels, you can use your checklist as a guiding light to ensure that you’re really making the best decision for your business.

Growing a business is tough. It’s hard enough as it is to fight for the attention of your audience then get them to trust you enough to buy from you. Don’t make it even harder by jumping into a space that leads you to transferring your financial stress on to your customers. When you make the decision to expand into a physical space it’s important to remember that your decisions should be enhancing the customer’s experience, not taxing it. Just because you drop a fro-yo spot in a popular shopping plaza doesn’t mean you’re entitled to the foot traffic - RIP Let’s Yo! East Longmeadow.

How Accountability Helps You Succeed

Do you have an accountability partner?

Having a great strategy or business model is only part of the process of building a successful business. You need someone to help keep you accountable and push you on your journey. Your accountability partner is the person(s) that keeps you moving forward, tells you when you mess up, looks out for you when you are venturing into new territory, and offers a different (objective) perspective. That can be a single person, a group of people, or even an online community.

In this post you see the 5 most important things you need to look for in an accountability partner. 

One quick clarification - this is about finding an accountability partner for your business. There are lots of versions of "accountability partners" that run a spectrum of interpersonal needs and various configurations, I will be covering exactly none of those. 

1. Empathy + Commitment.

You need to find someone who understands your story. They might not have to agree with your values or your core “why” but they have to acknowledge that what your business is doing is important. The same goes for you strategy and why you are looking for someone to help you stay accountable. They have to be committed to helping you take the actions and make the choices you need to make to grow your business. It will definitely be less than helpful if your accountability partner isn’t reliable in providing you feedback and constructive advice. Kind of defeats the purpose. 

2. Challenging.

They need to be challenging. What I mean by challenging is that they will do their best to ask you the hard questions about how you are moving your business forward. That doesn’t mean they have to question each and every piece of your strategic framework but a good accountability partner will not let you slip on deadlines or deliverables without a fight. Remember you asked them to help keep you in check because you needed some help with your accountability - try not to lash out when they are holding you to it!

3. Open and earnest conversation.

Your accountability partner needs to get to know you a little bit. It’s important to have conversations around what motivates you, any weaknesses you have, and what your goals are for this relationship. Trust is a big part of this so make sure the person you choose is comfortable with having these conversations with you. You also need to set expectations early on for everyone involved because this about helping you take action in your business and you are leaning on someone that is potentially on the outside for help. 

4. Decide on metrics.

My all time favorite saying is - What gets measured, gets managed. This absolutely applies here too! You are getting someone to help keep you accountable, it’s important that you are tracking your successes and failures so that your accountability partner knows how to best motivate you. Deciding on metrics includes deciding on how frequently they will be checking in on you too. You should be setting times to meet or chat regularly with preset metrics you are working on so that you can report efficiently and work on the things you need the most help with. 

5. Take responsibility.

As a business owner it can be almost too easy to blame your business woes on any number of externalities. That has to stop. Unless there is an absolute market meltdown you have a lot of power in how your business is perceived and the responses you make to what’s going on in the economy around you. Successful strategy is about choices and allocating resources. It’s about taking action and measuring results. It’s about iteration. Those are all things you can take responsibility for and it’s how your accountability partner is going to push you to being a better business owner. 

Everything in this post can be applied to what you might be looking for in an accountability partner or even mentor. If you are a part of a larger organization and are working on your department's strategy look for some senior leadership or even a colleague to help you up your implementation game.  Accountability partners can be an amazing resource and you shouldn’t think that having one means you are showing weakness. If it says anything at all, having an someone to help make you better can only be seen as a strength. 

If you are struggling to find someone you can trust feel free to reach out to me! I am always willing to help entrepreneurs that want to get better. 

Here's What United Airlines Can Teach Us About Customer Service

United Airlines what are you doing?! 

First David Dao, then a scorpion and now an engaged couple are escorted off a plane by a marshall for not wanting to disturb a fellow economy riding sleeping passenger. 

I reiterate, what are you doing?! 

Unfortunately investors (and the market) shrug off bad press a lot faster than the consumers that are the subjects of the press but, the last few weeks have been a great example of exactly how NOT to deliver good customer service. To support that point I’ll defer to the UAL (United Continental Holdings) stock charts and direct your attention to the fact that amidst all the non-apologies, outraged passengers and those “re-accommodated” by Oscar Munoz the UAL stock is still hovering around rolling six month average prices. 

Without spinning off and trying to tackle the complexity of running a successful airline business in a highly price sensitive, highly regulated, low margin and monopolistically competitive market I want to focus on one thing - the customer. 

I want to use the poor behavior of United Airlines as an example of how companies should be treating their customers during less than ideal times. Great customer service will help you weather bad press and it will keep customers coming back. In an industry where the services are pretty much substitutable that extra edge can make a big difference. 

1. Your customers have to come first. 

Your customers are the lifeblood of your business. You’re job as a business owner is to make sure that your customers not only get the service or product you sold them but also an experience that warrants them coming back (and bringing friends). Sometimes though, there are hiccups. Sometimes you run out of products, sometimes you deliver late and sometimes you overbook a flight. That should never be the customer's problem. Remember, they chose to spend their hard earned dollars with you and if something happens that impacts how you deliver your value then it’s up to you to make it right. 

Now with United and David Dao that could’ve meant maybe offering the Department of Transportation’s $1350 maximum if the delay a passenger experiences is more than two hours before moving from voluntary to involuntary denied boarding procedures. If you run into a situation in your business that prevents you from delivering a less than awesome experience then I sincerely encourage you to eat cost of over-accommodating now to make it easier for your customer. It will prevent you from having to backpedal to your audience later hurting your credibility and forcing you to constantly “re-accommodate”. 

2. Consistency matters. 

Most people are willing to try a new product or service at least once. If they aren’t happy with it they explicitly let you know by not engaging with your company again. So, first impressions matter. After that first impression though, for the customers that do come back, they will be expecting some consistency in their experience. That means that as a business owner you have to spend time and energy on making sure that the experiences you’re providing always meet the high standards you have for your business. It’s why your customers keep coming back and why they will trust you when you try to sell them something new. 

If a figurative scorpion happens to drop out of a figurative overhead bin it may be the result of some slacking standards. Possibly. I’ve seen this a ton of times, when a business owner gets a little too busy it can be really tempting to cut, what you think are little, corners. I really insist that you don’t because your customers will notice, they always do! 

The four biggest reasons for consistency then are:

  • it will allow you to collect data that will help shape future decisions about your business,
  • it creates accountability for you and your customers,
  • it helps support your credibility and keeps you relevant,
  • and it supports your efforts in delivering on the mission of your business. 

3. Happy customers make for great brand building. 

Everyone loves a good love story. What everyone loves more than a good love story is when an airlines keeps an engaged couple from arriving at their destination wedding location due to some really bad customer service. Now this story might not drop the stock price but the constant sound bites playing on the radio, TV stations and YouTube channels will not make for a happy image. I’m not saying that when your customers break your policies or are challenging to deal with that you should just let them steamroll you but there’s got to be a better middle ground. I mean, going from zero to air marshal seems a little aggressive. 

If you’re looking to turn your customers into your advocates you have to listen to them empathetically, acknowledge their feedback and look for solutions that are mutually beneficial. When people see your business as one that not only provides a great product or service but one that really cares about the people it serves you get buy in. This is how you build community around your brand and where your ravings fans will come from. 

To build or grow a business that people will emphatically stand behind you have to care about your customers. You have to show them an experience that will make them want to come back. You have to be willing to listen to them when things don’t go quite right. And, you have to show up for them every day. You might not have the budget to outspend a competitor’s marketing or investment in infrastructure and that’s ok. Consumer’s will always do business with the people they know, like and trust before any shiny marketing campaign or new technology. 

10 Quick Actions To Grow Your Business

Grow Your Business.jpg

T-Minus eight days until the 2017 tax filing deadline. I’m hoping at this point you’re not one of the people that’s waiting until the last minute to file because we all know that’s when software stops working, Post Offices run out of stamps and servers are so overloaded that your returns never get transmitted. But that’s not you right?!

Right!

With all that extra time you can work on other parts of your business.

I’ve been running into businesses lately that are looking to get out of the flurry of their day to day to do’s and get into acquiring their next clients or customers ASAP. Which is what I'd like to help you spend that extra time that you have because you won't be scrambling to file your taxes.

Spring, in general, is an awesome time of year for businesses - the flowers start to bud and business owners start to pop their heads up from their desks and realize that maybe they weren’t as proactive as they thought they were going to be through the winter.

So, let’s get to working ON (not in) your business!

It’s my job to make access to better strategy easier and more actionable for you. In the spirit of that, and to kick off Spring 2017 right, I have put together a list of 10 quick actions you can take today to better shape your business’ strategy and to make your business more profitable.

Action 1: Decide who is going to get your focus right now.

You need to be able to articulate those who are the most important in your business right now. Is it a specific kind of customer, a new market segment, the people you’re interacting with online, the neighboring businesses in your community, your fans, etc. Getting clear on who you want to give dedicated focus to will help you better hone how you spend your energy and more articulately measure the return you’re getting on those efforts.  

Action 2: Look Around.

Determine who your most relevant competitors are and understand how they do business. This will help you dial in what makes you special and how you deliver the best value to your customers.

Action 3: Business Aspirations

Get clear on what success looks like for you. Is it a dollar amount, a specific profit margin per transaction or a certain number of customers served? Being clear and SPECIFIC about what success looks like will help you make more consistent decisions in your business.

Action 4: What Gets Measured, Gets Managed.

You won’t know if you are spending your time well if you aren’t keep track of it. The same goes will all your resources. Right now, pick a few things that you think are important and start tracking them. How can you know if your business is on the right track if you aren’t measuring what you are doing?

Action 5: Communicate Your Mission

For your strategy and your business to be successful, everyone involved needs to understand not just what you are doing but why you are doing it. Is your mission and vision written or presented in the easiest most earnest way possible? People won’t support you if they can’t understand why what you are doing is important.

Action 6: Stop Planning.

Strategy is not planning. Strategy is deciding what’s important, creating a way to make systematically better decisions and taking action. Do something right now that will push your business forward in way you can measure that aligns with your mission.

Action 7:  Competitive Advantage.

It’s really tough to be the lowest cost option and the highest quality {insert what your business does}. Don’t worry about chasing market share and start worrying about what you do better than everyone else around you. Make a conscious decision to focus on keeping what’s special about you and communicating that specialness with everyone.  

Action 8: Look For Trends.

Customer’s tastes and tastes are always changing. Look for trends in how people are spending to make sure that you are delivering what they want how they want it.

Action 9: Do All Of Your Branding Assets Align?

Perspective and perception are everything in business. Take stock of what your business culture looks like. Does how you run your business match how you interact with your customers? What about your social media and other web assets - are all of those personas aligned? People are a big part of your strategy and how you present yourself to people matters.

Action 10: Simplify Your Business Model.

Businesses are most profitable when they are easy and intuitive to deal with. Look at how your business functions from start of customer relationship to finish. Are there any steps you can remove, streamline or products/services you can repackage. Your business model is how you make money, it’s important that you make it as easy and as clear as possible for better engagement.

Strategy doesn’t get better of more effective unless you actively work on it. You shouldn’t just be winging it! You might not have time to do all of these right now but pick the ones you think could help you get motivated and taking actions first and knock them out.

Commit a little time to making your business more profitable this year, I mean it’s still only April!

Oh oh oh..before you go, I want to share something with you! If you were wondering if any of the stuff I write about is worth anything I want to share a testimonial with you. This is a business I’ve worked with that’s seen some great results because of the work we’ve done together. It’s super exciting because it means the stuff we talk about (and the stuff I write about) really works!

Last week Nunzio gave a very compelling feature presentation about how he helps businesses maximize their profit. This week I want to share how he has supported Serenity since we started working together four months ago.

The first thing we discussed was setting Serenity apart from all the other yoga studios in the valley. And there are a lot of them! He asked me specific questions to flush out my value proposition and to get me thinking about my mission and vision for the business. Where did I land? Real people, doing real yoga, with their real bodies. Catchy!

Nunzio helped me identify and describe my ideal client so we could brainstorm techniques to sell more services to both current and future customers. We talk regularly about building relationships with fellow community businesses to generate sales and using current satisfied customers to help spread the word. We’re now talking about bringing in new products that I can sell to current customers to increase revenue. Green tea or Luna bars, anyone? He held my hand while I raised prices, he played a large part in developing the script for my commercial and he remains extremely patient with me as I struggle with my technological issues. And, we support all our ideas and decisions with data. The numbers don’t lie.

Drum role please … thanks to Nunzio’s support, I have increased my revenue year over year by 80%! I think that’s pretty impressive!

Finally, Nunzio is the consummate professional. He pushes me outside my comfort zone while also maintaining guardrails to keep me focused. He learned all about the yoga industry in order to provide educated opinions and direction. I am extremely grateful for his support and his positive attitude. Being an entrepreneur can sometimes feel pretty lonely, but it’s nice to know I have someone in my corner who is always watching out for me!


Michele Lyman
Serenity Yoga
— http://www.serenityyogastudio.net/

How To Ruin Your Credibility

Building a business is hard. It’s hard to make your way through all the little decisions you need to make to pump out a minimum viable product, launch, and then grow. It can be hard to get and then keep people’s attention. It can even be tough to figure out what makes your ideal customers tick. 

Well, I should clarify just a little bit. It’s not inherently hard, it’s a ton of work and for the most part people just make it hard on themselves. I’m not saying that there isn’t  learning curve or an investment you have to make in yourself, what I am saying is that it takes dedicated attention. 

It takes focus and dedication to not only get a business up and running but to keep it running. As you grow your business you will be adding even more variables to the mix. All the while you have to maintain your position as a credible resource. More than providing value at each transaction (social or monetary) your customers and clients will keep using you because they like you and can trust you. 

One of the cores of building a successful business is establishing yourself as a credible resource. A person (or business) that people can trust to deliver on the promises you make. 

If finding success is NOT what you are looking for then I have 5 ways you can destroy your credibility. 

My honest and humble opinion is that you do the opposite of these. 

NOTE: There is going to be a lot of sarcasm going forward. I really hope you do the opposite of these 5 Tips :) 

1. Don’t follow up.

Following up is time consuming. It’s easier to just “yes” your way through conversations, networking events, and professional/social interactions. Eventually people will just stop putting any value on you and your ability to deliver if you don’t follow up. Developing relationships takes time and empathy and if you treat them like a commodity you can potentially free up your time for other things.  

2. Be inconsistent.

Customers, clients, family, and friends stress too much on reliability and consistency. If you are bringing a product or service to market it’s always easier to wing it. Being inconsistent will help lower your stress on the quality and value of your delivery and it will generally lower everyone’s expectations. You only really need that first sale from every customer right?! 

3. Always do everything yourself.

It’s challenging sometimes to try to trust people with the really important stuff. It’s easier to just leave everything up to you and try to cram as much of it into any one working period as possible. You already have all the resources you need. Plus getting others to help you in the decision making process only slows your business down. If you do it yourself you know it will be done right. The first time...probably the second...at the very least the third time. 

4. Lots of excuses and blame everything on externalities.

Everyone knows that building a business means you have to wear a lot of hats. Because of that there are going to be a lot of variables that you won’t have control over. Can you really be expected to predict what the entire economy is going to do? In dealing with problems and trying to get your business to grow be sure to make yourself look as positive and without responsibility as possible by framing that you are doing your very best and everything that goes wrong is out of your hands. 

5. Be unbending in your business's policies.

If you are a solopreneur that means sticking to the rules you created in dealing with all of the stakeholders you interact with. If you are a manager or a business owner with employees it means being unyielding in policy enforcement. The rules are there to keep order right?! If a business is to grow it has to be as strict as possible when dealing with customers, vendors, end users - they don’t know any better. Plus like I said already the economy is volatile and unpredictable so if you have an ironclad policy the business will always know the exact parameters of who it can interact with and how those interactions go down. Just because the culture of business is changing around us doesn’t mean you have to. If a party couldn’t abide by your policy then it probably wasn’t going to be a lucrative interaction. 

So there you have it! 

The 5 Ways To Ruin Your Credibility. If you are guilty of any of these I would encourage a hard look into what you are doing and how you are interacting with the communities around you. If you are indeed trying to ruin your business or reputation then I suggest you exercise these 5 tips every day. I hope you’re not though. It makes me sad to think that you might be. I’m even sad now even knowing that this is a bit of a parody, I'm sad thinking that out there right now are some businesses and people doing these things and thinking it's ok.

Are You Making Good Decisions In Your Business?

When you decided to give the whirlwind of entrepreneurship a try, you were probably making lots of hard and fast decisions in your business.

You had to right?!

In order to figure out if your business was worth pursuing you needed data and in the early stages making lots decisions and collecting any kind data about your audience or customers is critical.

The real question I want to get to the heart of today then is:

Are you now making good decisions in your business?

Or, have you found what feels like a rhythm but has revealed to be a rut? I bet I know why your business feels like it’s just spinning its wheels in place and before we dig in there is a quick disclaimer.

This is not an intellectual exercise in the different models of making decisions – it’s the real-time actionable decision making that I want to talk about.

Let’s really start by calling it like it is, you’re hoarding your freedom aren’t you?

Hoarding your freedom is when you value the ability to make choices so much that it actually prevents you from making any choices. It’s like the friend who never commits to anything because he or she is waiting to see if any better plans are happening. Hoarding the freedom to make choices is a terrible thing. You are constantly burying yourself in the extremes of opportunity costs and for good reason...so you think.

Resources are scarce even for businesses that seem to be thriving, that’s always a barrier you will bump up against. Making bad decisions and hoarding freedom of choice can actually do more damage to your business than making decently-informed-probably-not-perfect choices.

In as actionable and fluff free a way as possible let’s make you a more decisive and effective decision maker.

Before we get into the actionable bits let’s bust a few decision making fallacies. Fallacies are the things that will eat up lots of time, energy, and produce more stress than your body should probably be handling. I don’t have to tell you that making decisions isn’t always easy. Something I want you to keep in mind through all of this and to help get you out of the indecisive stupor is realistically thinking about the worst possible outcome. If you aren’t an evil scientist out of a comic book then accidentally blowing up the Earth is probably not an issue for you. So what’s the worst thing that can happen? Probably nothing you couldn’t bounce back from with a little extra work and maybe even a pivot in your business. What I’m getting at is that a bad choice is temporary – even when it feels like it’s not.

Fallacy Busting 101

First is the Information Mud Pit.

Feeling like you need as much information as possible from as many different experts, gurus and web-sites is like having your car stuck in the mud while you just hammer the accelerator. Sure it’s going to make lots of noise, throw lots of dirt around, and maybe even start to give you some forward motion but eventually you are just going to overheat your engine, breakdown and still be stuck. Don’t let your brain throttle about in the mud and then breakdown.  All those expert sources are just people and they may not be in exactly your situation.  Do those people have the same values, personal/professional experiences, or even biases that you do? Work on gathering enough information to cover any of the possible outcomes you can predict (there will be some you won’t be able to predict) and move from there. Just like getting out of the mud in your car it’s going to take a little patience, finesse, and the right tools. Not all the tools ever made – the same goes for research.

Next is being too busy.

Everyone is busy so that excuse can’t cut it anymore. What you are doing is finding new and different (read: easier) things to deal with that can give you some satisfaction from safe handling the things on your to-do list that can be completed with the least amount of energy and work. The other part of the being too busy is trying to multitask a little too much. When your attention is always diverted in lots of different directions the choices you make tend to be less informed, less qualified, less efficient, and just chock-full-of-mediocre. So no more excuses! They will just keep stressing you out as your list of decisions won’t be getting smaller.

The last fallacy I want to kick in the face is that you can’t get what you need done properly because there are always little fires that need your immediate attention.

The problem isn’t that you are constantly in a flurry of micro-emergencies it’s that you have failed to set your priorities. Decision making effectively takes a little work and a little prep time. It’s in the prep time that you should be stripping out your perceived opportunities for making decisions and reorganizing them in a way that reflects their relative importance. There is a lot of importance in building momentum in getting things done but you shouldn’t front load your decisions will all the easy stuff. You won’t be taking advantage of the momentum and flexing your decision making muscles the best way unless you prioritize.

Now that we busted a few fallacies let’s get to some action steps help make you a lean, mean decision making machine.

1. Are you actually making the decision? Sounds like a silly question to ask but it’s important to think about whom really has the final say. If you are a solopreneur it may very well be you. But are you part of a team or have a partner you have to run this by? Decide who is going to be making that decision and then move forward with purpose.

2. Set the stage. Very few decisions you make will only affect you. So it’s important to consider how your decision is going to affect the rest of your business and stakeholders. Make sure that everyone is comfortable with what’s going on and understands at least a few of the major consequences of those choices.

3. Make every decision (even the tiny ones) part of the big picture. Remember when you started your business you put a whole bunch of time and effort into your values and mission. Yeah, those still exist. So make sure that your decisions are in line with what you want your business to continue to be and to be perceived being. Everything from color pallets, paper supplies, and even how you package your product will all impact how your brand is perceived.

4. Do your research. At this point I would like to direct your attention up a few paragraphs to the part about hiding behind information.  You want to make sure that when you are making your considerations you are using good information. Good information in hopefully leads to good decisions out. Keep your information lean and relevant. What that means is that you do not necessarily need to be an expert on how paper products are manufactured and distributed to pick a new coffee cup vendor.

5. Consider solutions, side effects and possibilities. You want to make sure you try to anticipate as many probable outcomes as possible. It’s important to be aware of how your decisions will interact with the rest of your business environment. Your goal should be to get the most out of whatever your resources are all the time. That and making sure the different departments continue to play nice together to make your business perform as best it can.

Your business’ integrity is more than just making sure that all your decisions are in line with your business mission. It’s about allowing your customers and stakeholders to trust your business. It’s trust in you and your brand that will keep your customers coming back. You get to being a trusted resource by continuing to make decisions (for your offerings and how you manage your business) that continue to improve the experience for the customer and client. That includes how you manage your finances, how you handle bad customer experiences, and even how you choose to interact with your community.

Integrity Pro Tips:

1. Always do your best to meet your commitments – saying no is ok.

2. Treat everyone with respect that includes your competitors and even naysayers.

3. Always be honest. If a delivery is late, you’ve made an error, or shipped the wrong product out - your customers will always appreciate you being open and upfront. Their compassion and respect for you because of that honesty might actually surprise you.

How To Keep Track Of Money In Your Business

When was the last time you really looked at your finances? It’s tax season right now so I’m sure you’ve been a little extra sensitive about where your money is coming from and where it’s going but, checking your online statements from the bank or credit processing company does not count. 

Better question – are you still on pace to make/earn/generate whatever income you quoted for yourself in those initial projections in <insert time of start here>? 

Are you tracking everything or is it more of a check book balance ballet? The checkbook balance ballet is a display of grace, creativity and checkbook ninja’ing that makes you proud that you made it to the end of another month, quarter or even week.  

Last question I promise, do you actually understand how QuickBooks works or are you just winging it? I would rather hear that you are keeping track of expenses in a raw unedited list of an Excel file instead of winging it through QuickBooks. 

One of my favorite things to hear about a business’ finances is when I hear owners and entrepreneurs tell me they are too busy to worry about the minutiae details of the finances and that as long as there is cash in the register they are doing OK. 

Those individuals couldn’t be any more wrong. 

This post is aimed at being your businesses minimum viable finance fundamentals crash course and it is going to teach you how to organize and what to look for in your Income Statements (Profit/Loss) and your Statements of Cash Flows. These steps and tips will help you plan better so that you are spending better (read: more efficiently). It’s also a good idea to know when your endeavor is hemorrhaging resources so that you can do some entrepreneurial triage and get yourself back on track. 

Cash Flow Statement  

A Cash Flow Statement (CFS) measures the amount of cash and cash equivalents that are coming in and going out of your business. A CFS literally follows the money. No, your bank account statements, check register, or receipt tapes are not CFS’s. All the information that those sources and sources like that provide should be housed in one easy to find and easy to read place. Remember it’s all liquid resources, no Accounts Receivable or Accounts Payable here – just cold hard cash (flow). 

Here’s what cash flow will look like. First it starts with your cash on hand for the period you are measuring like days, weeks, months, quarters, etc. Then you should break it out into three big sections. Cash flows from operations, finance activity, and asset activities. Within each one of those sections you will be listing the cash-ins then cash-outs and a subtotal for each section. (Positive cash flow implies more cash in than cash out which is a good thing most of the time.)  Lastly you tally the three sections add in your beginning of period cash and what you are left with is your cash at the end of the period all nice and tidy right?! Not always. Now that you have an idea of what the statement will look like let’s break out those sections. 

Operations

This is the cash that comes in or goes out that is directly related to the core business operations. The biggest cash-in you will probably encounter is the income/revenue received from sales or services offered. After that common cash-outs will be stuff like: rent, utilities, payroll, and inventory. If the expenditure has anything to do with the core business operation and it was paid in cash it will be categorized under operations. 

Asset Activity (Economic Investment)

This is the cash flow activity surrounding bigger ticket items. These are things that would be categorized as plant, property or equipment. Let’s take a look at an example. Say you sold an old delivery van so that you could buy a new oven for your bakery. It would be a cash-in under Asset Activity for the sale of the delivery van and a cash-out for the purchase of the oven. If those were the only two transactions that period and you had cash left over you would have a positive cash balance in this section. 

Lastly is Finance Activity

This is the cash activity that relates to how you are using your money. If you took out a loan and have to make payments every month. That would be a cash-out. If you are an S-Corp or an LLC and you pay dividends or make disbursements to the shareholders that is a cash-out.  If you issued any stock or sold any bonds to raise money then those activities would be cash-ins. 

The goal for the CFS is to stack the information from period to period next to each other. You want to be able to look for trends, patterns, or things that are out of the ordinary. This will be able to help you find spots where you could potentially save money or give insight on where your money is going every month. One of the most popular things I hear from entrepreneurs is that they feel like they pour huge sums of money into their businesses and then look around and are unable to fathom where that money went. Your CFS will show you exactly where all that money went. 

Profit and Loss Statement/Income Statement  

An Income Statement or Profit and Loss Statement (P/L) is a financial statement that outlines your business’ revenue and measures it against your expenses. The goal is to find out how profitable your business is for that period and the periods to follow. It’s a crucial planning tool because it shows you exactly what your business is doing and whether or not you are sticking to the budgets you started your entrepreneurial adventure with. The P/L can also help you keep tabs on things like rates of product returns, and making sure that your costs to bring your product or service to market don’t get too out of control. This is different than the CFS because it takes your Accounts Receivables and Payables into consideration as well as a few other non-cash accounting measures like depreciation. 

There’s a little more involved with the P/L so let’s jump right into what goes into it. Then, we can talk a little more about how to use both of these statements to keep your business running like the well-oiled machine you thought it could be at the start. 

Net Sales

The net sales figure represents the amount of revenue or income generated by the business. The dollar figure recorded here is the total sales, less any product returns or sales discounts.  This is what you want to keep an eye on if you are starting to look at how fast your business is growing.

Cost of Goods Sold (COGS) 

This represents the costs directly associated with making or acquiring your products or services. Costs include materials purchased from suppliers used in the creation of your product, as well as any internal expenses directly expended. If you are a service based like a cleaning business costs might include the supplies used to get to the final deliverable. 

Gross profit

Gross profit comes from subtracting the cost of goods sold from net sales. It does not include any operating expenses or income taxes. Focusing on how much your Gross Profit is changing over time in its own amount as well as in relation to your Costs of Goods Sold can be important to follow. Financial goals can be to manage and maintain your gross profits as you scale your production up. 

Operating expenses

These are the everyday expenses incurred in the operation of your business. Some of these categories will even match some of the items in your CFS. In this sample, they are divided into two categories: fixed expenses and variable expenses. 

Payroll and Salary

These are the salaries, wages, and payroll plus bonuses and commissions paid to your staff. It’s for full time and part-time alike. 

General, Selling, and Administrative

This item is made up of all the direct and indirect selling expenses and the administrative expenses associated with being in business. These could be costs associated with advertising or marketing your products or services, travel, meals, equipment rental, and printing costs. It’s an umbrella for everything that’s not Operating, COGS, or Payroll.  
Rent: These are the fees incurred to rent or lease office or industrial space.
Utilities

These include costs for internet, cable, heating, air conditioning, electricity, phone equipment rental, and phone usage used in connection with your business. 
Depreciation

Depreciation is an annual expense that takes into account the loss in value of equipment used in your business. Examples of equipment that may be subject to depreciation include copiers, computers, printers, and fax machines.
Miscellaneous Expenses

Expense items that do not fall into other categories or cannot be clearly associated with a particular product or function are considered to be other overhead costs. These types of expenses may include insurance, office supplies, or cleaning services. It is crucial that you outline each of these costs as sub-items below this heading. 
Total expenses

This is the summation of all expenses incurred in running your business. It does not include any taxes or interest expense on interest income if there is any.

<Take a breath> A little recap. 

If you are following along, you have outlined the quantity of sales that have come in. Then you subtract away the cost of making the sales to get to Gross Profit. Then you subtract away all the rest of the expenses and costs of doing business in general and that leaves you with another magic number – Net Income Before Taxes. This, like Gross Profit, is another place you want to keep an eye one. An example of something that you may encounter is your Gross Profit is increasing but your Net Income Before Taxes is staying the same or getting worse. Big Red Flag! When you see that it’s time to get back into those expenses and CFS for the period and investigate where all your potential profit is going. Ok, on we go…

Net Income Before Taxes

This number represents the amount of income earned by a business prior to paying income taxes.  I had to state it like this just for the sake of good form. 

Taxes

This is the amount of income taxes you owe to the federal government and, if applicable, state and local government taxes. Pro Tip: Don’t sleep on your taxes. I’ve seen instances where the IRS can and will issue liens on bank accounts. That makes operating your business very tricky if you don’t have access to your accounts. It makes paying employees even trickier. Stay on top of your reporting or get some help with it. The IRS aren’t the bad guys (not all the time anyway) and they are willing to work with you but you have to have your act together. 

Net income

This is the amount of money the business has earned after all your expenses, interest payments and paying income taxes. This is wrongfully the first place a lot of businesses look to figure out the health of the business. Don’t let this be you. It’s also easy to see extra money and just put it in your pocket – also a bad idea. You have to evaluate the opportunity costs of using that Net Income in a variety of ways. Sure your pocket is one way but so is reinvestment, increasing the pay of your employees, paying down and debt more rapidly, or just saving it for a rainy day. 

Lastly if it’s negative then you definitely need to dig back into these financial statements and figure out where your resources are going as well as ways to increases those sales numbers at the top. I don’t want to spend too much more time in these statements though – think of this as a reawakening to your financial management responsibilities. Let’s get into some metrics you can use to gage the health of your business without worrying about flipping through each line item of each statement.

You may have noticed that there was no talk of the Balance Sheet. Not because you shouldn’t like or care for the balance sheet but because when you are in the trenches and trying to make changes on the fly you will need the most up to date information possible. You are going to want to keep an eye on the speed at which money is coming in and out of your situation. The Balance Sheet is more of a long term snapshot. Just like with the P/L and the CFS, there is a template for the Balance Sheet and some information on Balance Sheets in the Resource Section at the end of this book. 

On to the ratios. 

The two types of ratios that are really important for figuring where you stand and how to plan are efficiency ratios and liquidity ratios. How this is going to go is I will give you a brief description and then the ratio. The idea is that you start using these ratios to not only track your own progress but that of your industry. You can get some industry ratios from places like census.gov and others by doing simple searches in Google. 

Quick Ratio

Is a measure of a company’s ability to handle debt if it needed to, or its short term liquidity. The higher the ratio the more liquid the firm - which is a good thing. 
= Current Assets - Inventory/Current Liabilities
Debt to Equity Ratio 

This measures your leverage. It’s how much debt have you used to help your company grow. Having and managing debt can be a good or a bad thing depending on how you handle it. The important thing is keep track of what the ratio is doing over time as well how you servicing your debt. More debt might not always mean more growth. 
= Total Liabilities/Owners Equity 

Interest Coverage Ratio

This is an interesting one. In the planning process it’s easy to get caught up in showing that you can cover and debt that will be issued. It’s equally, if not more, important to make sure that you can cover the interest payments that go along with that debt. Here the rule is a ratio of 1 or more means you can service all your obligatory interest. 
= Operating Profit/Interest Payment

Collection Period

This ratio will help you keep track of how long it takes clients or customers to pay. The longer the period the more working capital you may need to support your business while waiting for payment. Remember efficient businesses don’t really use much extra cash. It can also help keep your payment policies tracked and enforced. 
= Ending Accounts Receivable/ Revenue per Day

Lastly ROA and ROE

Both of these ratios will help you get a sense of how much return you are getting out of your Assets (A) and your Owners Equity (E). As you keep track of this you will be able to see how capital expenditures are affecting your bottom line or if you are really using everything you have to it’s best potential. Having the money to buy stuff is great but buying stuff alone is not going to make you money. You need to manage the stuff and the people in charge of that stuff appropriately. 
= Net Profits/Assets and Net Profits or/Owner's Equity

Now this is not the conclusive list. These are a few key ratios you should start with when you are snapping out of the entrepreneurial honeymoon. From here it will help you to pick the spots in your financials that you want to focus on and work on to make stronger. These are some of the ratios that can help you see patterns for better or worse before the raw data might indicate. The statements these variables come from also vary in length and complexity. You need to keep on top of this so that you can confidently focus more time on doing the work that matters most to the people you serve. 

Otherwise, you might not be in business for as long as you planned. #moneymatters

How To Keep In Touch With Your Customers

In this post I want you to think about the people that buy from you.  If you're just starting out or are restarting don't fret, this post is also for you.  The questions I challenge you to think about are:

How are you keeping in touch with your customers?

Are you getting regular and timely information out to your customers that’s relevant to their experience – like impromptu closings?

Are you engaging in a way that is more than the traditional marketing touch points?

More than just flyers, coupons, surveys, and talking to the customer on the way out?

More than TV/Radio commercials, possible news interviews, and even the occasional hosted special event?  

You will move yourself to the back of the memory-and-relevance-bus because your customers, even your best customers, aren't connecting with your brand outside of the basic exchange of goods and services for money experience. If you settle for just a basic vendor experience you will only be relevant in your stakeholders mind when your offering satisfies their need – not bad but you should be striving for more.

The type of business you run doesn’t matter when it comes to staying in touch with the people that support you. You are just creating excuses if you can’t engage with your customers because you’re a small restaurant, café, bookstore, pet walker, or even an electrician. The idea is that you can always provide value for people and establish yourself as a resource wherever your customer is in the buying cycle.

“I am already getting the sale. Why do I need to engage them? Isn’t the fact that they bought from me and will possibly continue to buy from enough? “

Short answer is no. Longer answer is nooooooooooooo!

A report put out by Bain & Company in 2011 reported that customers that engage with brands regularly spend a lot more money in those businesses. That is to say that customers that have meaningful engagement, above and beyond your traditional marketing touch points, reported increases in revenue between 20%-40%. That’s huge if you want to keep your business growing. Not only that, the reach grows exponentially as more and more people see your customers engaging with you in a very public way.

I can already feel your eyes starting to waver because you know what’s coming next.

Social.

Social Media, every business guru’s favorite topic. Maybe you’ve found some success or maybe it’s been a huge waste of time. Either way you have set up your accounts and get to it when you have the time. Most likely, and sadly, only if you have something to announce to your followers. Stepping up on your social soapbox to only announce when things are happening for you is not a great use of resources. You won't be able to cut through the noise.

My personal favorite social media faux pas is logging into Facebook and by the time you walk away from it two hours have elapsed – I call this “social media time traveling”. This is not a full on tutorial about social media and you should use whatever platform works best for you to engage with your customers. This post is about getting to the heart of what you are going to do to create some benchmarks to measure yourself against and some concepts to put into practice.

Here’s the plan for kicking up your customer engagement and ultimately kick up those revenues.

1.    Decide what you are measuring when you start a campaign.

Are you trying to grow by acquiring email addresses to market to later? Is your goal just to spread awareness? To get people to talk to you? Then track those Facebook comments. (Be wary of “Likes”, more doesn’t mean that it is a reflection of authentic engagement)

2.    Come to terms that engaging with customers is going to come in a full range of experiences.

It’s going to take work and it should feel like you are having a conversation with your audience. Think about your favorite YouTube channels – odds are they make you feel like you are part of their community every time you watch their shows.  This also means you have to be an amazing listener. You need to be able to understand their needs and wants just as well as what gets them excited and is interesting to them.

3.    Mobile is only getting bigger.

You don’t have to go out and create a new app (unless you want to) but whatever medium you use should be mobile friendly. Facebook groups, Twitter, and even Instagram are checked every minute of every hour so make sure you are reaching out with value and not spam.

4.    Everyone needs to benefit. Remember your customers or potential customers are always going to be looking for value.

So you need to do more than just spam your happenings. Find things that your customers can relate to outside of your product or service and spread the love.

5.    Listening is the opposite of just constantly shouting at your audience.

Listening is about trying to keep people talking to you after the sale. It’s about collecting information about your user’s experiences (great and not so great) and about showing them that you are making real efforts to take that information and improve the experience. 

Lastly, stand for something that’s more than your sales. Get involved in your community and get to know people in a way that has nothing to do with selling to them. Engaging your customer and being a resource for them outside of the sales cycle will keep you in their conversations beyond the immediate need you serve.

Remember: 

“Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.”

-   W. Edwards Deming

How to Get More Done In Your Business

Don't get stuck staring at the loading screen in your business. 

Don't get stuck staring at the loading screen in your business. 

There are lots of ways you can organize, operate and deliver value as a business. You can be an independent online business, an Amazon seller, a cooperatively owned farm, a brick and mortar restaurant, or a residential cleaning company to name a few. If you can identify a problem and offer a solution that people are willing and able to pay for, you have yourself a business. Even though businesses come in all shapes and sizes, for all the different problem-seekers and solution-offerers that exist there is something that connects them all.

That common thread that ties all of these business together is the drive to produce the best quality product, service, or experience using as few resources for as much profit as possible.

That was a mouthful.

Yes sustainability, honoring mission, and providing value are also big drivers for business but to keep operating, on average, it takes bringing dollars in the door. Then using those dollars in the best way you possibly can to continue to bring the next dollars through the door.

This post is going to provide you with some tools to help make sure you are being as efficient as possible.

Start by segmenting each department or operational area of your business into projects. Boil everything down to the most basic functions in the business. Making something simple but not simpler should be reminiscent of methodically putting together your childhood science fair projects or at least putting together IKEA furniture (way more fun than the furniture though). The term we use to describe this process is Project Management. Project Management is all about planning, organizing, monitoring, and allocating resources to successfully complete a specific outcome.

Operationally, most businesses are made up of lots of projects – some short term and some long term.  Take this process and adjust it so that it best works for you – here is your crash course in project management.

1. Start with the cash flow. More specifically where cash is going and how it is being used in your business. Some easy ways to bring these costs down are to re-evaluate your shipping costs, credit card processing and insurance or liability needs.

2. Manage your businesses schedule. One of the biggest drains on resources and reason businesses hemorrhage money is over-staffing.  If you are a one person operation, audit your time hour by hour to see where you get the most return on your time. If you have employees it means possibly trimming those hours. Are you paying the right people to do the right job?

3. Plan how your product or service goes from client engagement to final delivery and map out all the costs and tasks along the way.

If this is feeling a little overwhelming try breaking down each department or group of related activities and treat them like individual projects. Then find the goal of each project by asking:

1. Does this department or group of activities have specific or measurable goals? What are they?

2. Does this department (now project) contain all the related tasks to reach those goals?

3. Is there a clear start and end point in the process?

4.Is this so important or different that it needs to remain a standalone project? If not where can I combine these activities to be more efficient?  

Now you have your project defined and it’s time to set it up.  Here is a format to help you define what you need within each component of your business. It’s called the Triple Constraint:

1. Time Constraint: When does the outcome need to occur or is required?

2. Budget Constraint: What funds or resources are available to get the desired outcome?

3. Performance Criteria: Are there any barriers or quality issues related to producing the outcome.

For each project set up charts to track progress and measure from week to week, month to month and quarter to quarter.

Here is a personal example –

Sometimes, I hate doing the administrative work associated with running my consulting business. I wish I could just spend my days talking to people and lecturing to my students. But, invoices need to be sent out. So I have set up some constraints for the A/R or Invoicing Project in my business. This will ensure that I utilize my resources as efficiently as possible. For my time constraint I block off a chunk of time on Monday’s biweekly to go over and review invoices that need to be sent out. I physically and mentally limit myself to 1.5 hours maximum in dealing with this. If it needs to take longer I’ll pick another favorable time and do it then. My time, like yours, is important and after 1.5 hours I probably need to be somewhere else.

Budget Constraints are interesting for me. I tend to be a softy when it comes to invoicing and each week give myself an allowance for discounting. That’s part of the budget as well as the monthly fee I pay for Freshbooks, my invoicing and financial management service. Freshbooks is where I keep a good chunk of my client invoicing and billing information and is something I highly recommend to everyone.

That leaves me with quantifying and measuring performance. For my invoicing project this gives me the opportunity to see my billable hours or any other client services and measure them against the past. I can see how many invoice related communications are sent, follow up with old invoices as well as send out new ones. It also gives me the opportunity to review for errors or test new tactics to try to get my invoices paid faster and more accurately.

A real life fumble on my part was leaving the wrong mailing address on my invoice and losing out on a client’s payment for over a quarter – that’s how long it took for the Post Office to get the client's letter back to them. Quality of information and process is super important – otherwise you end up like I did and carry an opportunity cost on receiving that late payment.

Now it’s your turn. Start small and try to build momentum by breaking down one of the things you need to get done in your business into a single project. It’s not going to be perfect but taking the time to break down what really needs to get done, how to measure success and how to build systems around the stuff that you can. Taking the time to do this work will also help you get out of your own way so that you can do more of the work that matters to you and to your business.

Why Blue Oceans Matter In Your Business

Blue Ocean Strategy is one of the business buzzwordy concepts that’s actually worth knowing about if you’re trying to authentically bring your business into the world. Its a methodology and planning process that was penned and cultivated in a book, Blue Ocean Strategy, by a couple of strategists and professors from INSEAD (international business school) by the names of W.Chan Kim and Renee Mauborgne. They combed through mountains of strategic decisions made by firms over the last century and boiled them down into a strategic framework that you can use to help better position your business.

It’s an awesome idea and a great way to visualize how your business is making strategic decisions.

At the heart of it, Blue Ocean Strategy is all about finding the open and untapped waters of your market. You are literally looking for either new markets or under-served markets that you can pivot your business into and hopefully capture.

To quote one of my favorite authors and TED Talk speakers Malcolm Gladwell - you are giving your market some “extra chunky” (Here’s the TED Talk if you’re curious but make sure you come back!)

What this blog post is going to do is break out the major concepts of the Blue Ocean Strategy framework. This is not so much a review of the book but it will hopefully help you getting into a mindset that helps you find ways that you can differentiate and find a competitive space. That new mindset will give you the opportunity to offer a very specific and niche value.

The first big concept in Blue Ocean Strategy is working on Value Innovation. Value Innovation is not an easy thing to pull off as it’s simultaneously finding ways to offer more value while lower costs. One tools that you can use to help find your Value Innovation is something Blue Ocean Strategy calls the Eliminating-Reducing-Raising-Creating Grid. This grid is a tool to help you organize your business so that you can flush out where you can differentiate against other businesses in your industry. You are listing the factors in your business that follow the prompts in the grid and taking a strategic look at what’s happening outside of your business.

After you work on ways that you might be able to find your Value Innovations there is a four principle framework that will help streamline your strategy process. These principles will help you focus the factors you flushed out and really hone in on how you can position your business so that you are serving your own blue ocean.

1. Rethink your market boundaries.

Where can you create an uncontested (low competition) market? It’s not always easy to move away from trying to make your slice of the pie bigger and work on baking an entirely bigger pie. There’s no reason you can’t go out and redefine who your market is.

2. Think of the big picture.

Everything is variable in the long term so you need to think about what your business might look like a few years down the road. It will help in the planning process in the short term if you have an idea of the culture, processes, and value you want to offer in long term. Everyone wants profit so don’t just try to plan for that - this process will blow up in your face.

3. There’s always a little risk in this but you have to start thinking about offering value beyond what your customers think they need.

You are in business to provide a solution to a particular problem or set of problems. To find your blue ocean you have to try to get your finger on the pulse of the next set of needs your customers are going to have. How can you add value to what you are already doing so that your offerings are so full of value that you can’t possibly be substituted out.

4. Get your strategic sequence right.

This is not an overly complex sequence and it’s really powerful. It’s three big questions and if you are unsure or answer “no” to any of them you have to go back and rethink it through. The first is, are you offering the most value as possible, economists would call this utility? After that is the price you are asking aligned with your product or service for your market? Lastly, can you produce it at low enough costs to get to the profit goals you have set up for yourself and the business?

The last part of the Blue Ocean Strategy has to do with how you execute and implement. It relies on and utilizes tipping point point leadership and the development of fair processes. To boil those into the most actionable and digestible nuggets possible you should be thinking about how you can ignite the values and beliefs of your stakeholders and use passion to ultimately spread strategy. You get to leading with passion and conviction through trust. That’s where fair processes come in.

Fair processes happen when your stakeholders, employees, or partners trust that you will make the right decisions in terms of moving the business forward. What are the things that you can do to show the people that rely on you that you deserve their trust and have the compassion and drive to move your strategy forward.

Blue Ocean Strategy is a really robust framework and it would definitely take more than just one blog post to really do it justice. My hopes here were to present you with a different way to think about how you are bringing your strategy to life. How can you infuse a little Value Innovation, tipping point leadership, fair practice, and the four principles above into what you are doing everyday to push your business forward.