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VOL 2. EDITION 1 | |
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Avoid Painting Yourself into a Corner… Have a Stand-In Ready for All Your Business Ups and Downs One not-so-pleasant aspect of having your own business is what happens when you are ill or have an accident and cannot make it to work? Work is money when you are in business for yourself, so this question is one that needs some attention. Even when you are temporarily down and out you need to have a backup plan to keep your business going. Ideally, we would all have someone who could just step in and take over should the situation arise. However, when you are used to doing everything yourself, it can be difficult to take help when you need it or delegate tasks that someone else can do. After all, no one is as passionate about your business as you are. A central theme in Michael Gerber's The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It is that most businesses fail or never reach their full potential because their owners spend too much time doing the work that the business does, rather than managing and growing it. And if the owner should become incapacitated for a period of time, the business literally cannot function. Three important steps to creating a back-up plan for your business are:
A number of things happen when you implement these steps. First, you don't have to perform the process. Second, it empowers your team members to take on more responsibility. And third, when you systemise, you automatically develop what we call "the way we do it here." Talk to your business development consultant at GNS Group to learn more about how you can start working ON rather than IN your business, and create a back-up plan in case of your unplanned absence.
Are You Letting One Customer Hold Your Business Hostage? Financial advisers tell you to hedge your bet by diversifying your investments to minimise risk. You should also diversify your business for the same reason: To reduce risk by avoiding dependency. To insure that you remain in business, be certain that no one customer is in a position of controlling your company. You may lose control if you allow your business to be held hostage by a powerful customer. And it can happen easily. There are countless stories of small- to medium-sized companies falling victim to the temptation of the comfort and ease of catering to a big customer. The anticipation of change should be part of your business planning. Greek philosopher Heraclitus left us with the enduring message: "The only permanent thing in life is change." We change, our customers change, our markets change and our products must change. For example, you may have a large, profitable customer that accounts for the bulk of your business, but what if your customer fails? What if another company buys your customer? What if the customer decides to buy from your competitor? So many things are possible that dependency on one or two customers is dangerous to your survival. Make sure you plan ahead and diversify your customer base.
Sketching out the Competitive Landscape For anyone trying to grow a business, one of the first tasks is to map the competitive landscape and then continue as long as you stay in business. With a good understanding of the competition facing your business, you'll be able to spot and exploit opportunities as they develop. Ignoring the competition or lulling yourself into a false sense of security could mean nasty surprises down the road. The following points can help you start developing a strategy:
Don't Brush off Team Members' Life Demands When it comes to managing a team of people, here's a universal truth: At some point each one will face a personal crisis. How it affects your business largely depends on the environment you've created in your workplace. Family and health situations can disrupt the most conscientious performer's production, and you might not know there's a problem until it's out of control. It's important to create a culture where employees can come to their managers before a situation rises to a crisis level. Establishing an open corporate culture is not a matter of following any particular recipe. However, there are a few key ingredients needed for a successful approach:
If you sense something is wrong, try taking these steps:
Have a Palette of Strategies to Use During Slow Times Every economy and every business has ups and downs. The trick to weathering the storms successfully is to be prepared for them. Strategy #1...Reactivate Dormant Accounts The quickest and easiest way to do this is to sit down with your list of past clients or customers, call them, say hello, and see what's going on. Don't make this a hard-sell call. Tell them, "Hi, it's Jane. I'm calling just to check in and see how you're doing, since it's been a few months since we last spoke." Ask what's new...how s/he is doing. You don't have to ask for work directly, but when you end the conversation, you might say something like, "Well, it's been good talking with you. Keep in touch, and if there's anything I can ever help you with, don't hesitate to give me a call." This lets customers know you are interested in working with them again — without putting the pressure on them to give you an order right then and there. If you are uncomfortable phoning, you can send a letter/flyer/brochure, perhaps calling their attention to a recent article, literature on new products or services, or testimonial letters from your other customers. This accomplishes essentially the same goal--to recontact and reconnect with customers and remind them of your existence, products, services and availability. What kind of results will you get? It depends on whether you catch someone with an immediate or upcoming need. On average, expect one order or assignment for every 10 calls you make. Warning: Don't call up and say, "I'm not busy and need work right now; do you have any assignments?" or "Things are slow; how about an order?" The customer feels pressure, feels s/he has to come up with an "excuse" why they haven't given you an order lately. This is uncomfortable and awkward for both of you. It also makes you seem desperate, and you do not want to seem hungry or needy. Always say you are calling to help them. Strategy #2...Provide Superior Service to Current Customers When business is slow, you want to do everything you can to hold onto your existing customers — your bread-and-butter accounts. The best way to hold onto them is to give them not their money's worth, but more than their money's worth. Now is the time to go the extra mile, give that little bit of extra service that can mean the difference between dazzling them and merely satisfying them. The best protection against a downturn in new business is an active list of delighted customers — people who give you a steady stream of continuing business. So cultivate your current customers. Nurture them. Serve them well. Do everything in your power to delight them so they keep coming back for more. Strategy #3...Have Existing Customers Drum Up New Business for You It's probably fair to say that the customers you're currently dealing with now associate with like-minded people. People who are in a similar income bracket and have similar interests, hobbies, buying habits, ethical and moral beliefs and even personalities. Better yet, people in decision-making roles who purchase from you tend to know other people within their sphere of influence or industry who are your ideal potential clients — people like them who could have a truly similar need for your products or services. And therein lies your sleeping giant. A giant you can harness by creating a structured way of capturing these referrals from all your customers…a referral system. A system that means you have a way of asking every customer to refer other customers to you. In this way, referrals no longer come to you by chance or default. Instead, it's a predictable, ongoing process. This suggestion often deters people because they don't want to be seen as too aggressive. Do not look at this strategy that way. If it's true that most of your customers are happy with your business and the products and services you sell, then it follows that most would be quite happy to refer you, given an easier opportunity to do so. In fact, a systematised referral system merely provides your business with a way of rewarding people for what they're currently doing (referring people) and encouraging them to do that more often! Even if only 50% of your customers actually referred people to you and then only 25% of those people actually purchased, you'd still be ahead, wouldn't you? In this example, you could have added a quarter more to your client base for very little cost. (Of course, these figures will change, depending on your type of business and the quality of your referral system.) Strategy #4…Plan an Ongoing Marketing Campaign This strategy has two parts to it. When things are slow, you increase the percentage of your time spent on marketing and prospecting for new business. During a lull in business, you need to make this extra effort to attract clients or customers, follow-up on leads and close sales. The second part of the strategy may not be so obvious. It's this: To prevent a lull in business from ever happening in the first place, you should market consistently and aggressively all year long, every week — not just when you need the business. Planning an ongoing marketing campaign ensures a steady stream of new business leads. Marketing done today begins a selling cycle that will result in new business when you need it six months from now. What types of marketing work best in slow times? Use a combination of results-getting direct marketing (direct-response print ads, sales letters, self-mailers, postcards, special offers) plus low-cost/no-cost visibility-enhancing publicity techniques (press releases, articles, speeches, booklets, seminars, newsletters). Avoid costly image-building marketing — such as large space ads, slick corporate brochures, expensive annual reports and other marketing communications that can drain your budget without producing measurable results. Strategy #5...Add Value to Your Existing Services In a slow economy, customers in all areas are more concerned with price than ever before. Actually, their real concern is making sure they get the best value for their dollar. You can win new customers and retain existing ones by enhancing your services and providing your customers with more value for their money. For instance, if you are selling a commodity item, you could add value by offering faster delivery than your competitors. Or a larger selection. Or more colours. Or more options. Or easier payment terms. Or a better guarantee. There is no need to give away the store and promise an excessive amount of extra service. Just a little extra effort on your part will be perceived as a significant increase in value by the customer. The extras you provide need not take a lot of time or cost a lot of money. Always look for ways to give the customer not just their money's worth but more than their money's worth. These little extras always pay big dividends in customer goodwill and ongoing future business. Strategy #6...Keep Busy by Working ON Your Business A slow period in your business is a good time to busy yourself with internal projects that will improve the business. Such as developing a new marketing strategy, making technical improvements to an existing product or service, auditing and improving your customer service procedures, revising your newsletter or Web site or any of a hundred things that need doing but never get done. Now you have the time. So do them.
How to Make the Most of Your Newsletter Be sure to read each article with the mindset "How could this apply to our business." Thinking of it that way will guarantee that you get value. Better yet, take notes as you read and commit to having the ideas implemented by the time the next edition arrives. Also, make copies for each team member. To really make sure something positive happens, work with your business development specialist to talk your team through the ideas and how to set a schedule for getting them implemented. We're here to help you get started. GNS GROUP
"Even if you are on the right track, you'll get run over if you just sit there." —Will Rogers
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.
All rights to the content in this publication are reserved by RAN ONE Inc. Any use of the content outside of this format must acknowledge RAN ONE Inc. as the original source.
© 2001 RAN ONE Inc
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Avoid Painting Yourself into a Corner…