Thoughts and ideas on growing a business

A year of challenge

 

This year will be a challenging one for many of us; in fact survival will be the objective of many small businesses. Here I have gathered ideas and approaches – which are being implemented by clients – to demonstrate that proactive actions can have positive returns. Many of the ideas are as much about changing attitudes and behaviours as about taking decisive action.

 

Why should anyone buy from us this year?

This was the question for a recent workshop I facilitated. Yes it is good to know your USP (unique selling proposition) as it is a reason why people buy from you. But for most businesses their selling proposition is not unique. Location, accessibility, quality, convenience, customer service, price, reputation all contribute to purchasing decisions by customers. Make sure you know which elements of this package influence your customers.

 

Increase customer focus

Customer focus is a clear requirement, and I think it is more spoken about then actually delivered. Aim to provide excellent customer service to all existing customers and maintain relations with ex-customers. In fact go out of your way to be in contact with ex-customers, they still have potential to be won back, so aim to stay on their supplier list.

 

Business connections

In my mind much networking has limited business value and is social in nature (and there is nothing wrong with that!) – I suggest you focus on connections where they are of value to your business (or to your customer’s business). It is not how many connections you have on Linkedin but what is their potential value to you and your network.

 

Staff communications

Communicate to your staff: through the hard times talk to your staff more, share your plans and targets, and engage with them how objectives are to be achieved. United teams where conversation is open and ideas shared will weather the stormy months ahead.

 

Be online

Work out what makes sense for your business (blogs, LinkedIn, facebook, web directories, google maps etc). If you are selling to the mass market, put your message everywhere, if you are selling to a niche market make sure your potential customers know of your products/services and why they should buy from you. Attractive and cheap websites are available to all using software such as Joomla templates.

 

Suppliers

Treat key suppliers as valued customers. Forming partnership type relationships with your suppliers is more important now, make sure you have agency and distributorship agreements signed up and confirmed. There is little point in building a market for an OEM and then losing the agency because of poor communications and key supplier management.

 

Cash flow management

Yes, cash is the lifeblood of a business. Prepare your budget and update your cash flow projections at least monthly. Regularly updated cash flow forecasts and management of working capital are key to business survival this year.

 

Cutting costs

Several clients of Celtar have made considerable savings by renegotiating their rent in the middle of lease periods. Rent for commercial property has fallen everywhere back to the levels of five or more years ago. You are now in the driving seat and can use professional negotiators such as (only the more commercially minded of) solicitors to negotiate on your behalf.  

 

Shop around for professional services

One client has reduced auditor fees by 30% by shopping around, and staying with his current auditor. Negotiate solicitor’s fees upfront so you know what you are getting. For value for money advice on employment law join the SFA (www.sfa.ie) or ISME (www.isme.ie) and avail of their well regarded services.

 

Staffing reviews

In previous recessions layoffs and redundancies were the usual reaction to a slowdown. Now business owners are looking to a more flexible series of options. Why? Because there is a strong belief that the economy will recover sooner so keeping the talent that has been recruited and developed makes sense.

Reductions in salary, of 10 to 30%, are commonplace amongst Irish SMEs. In technology companies salary cuts are made reflecting today’s market rate for a job and bring salaries back to what they were in 2004. Often the senior positions are taking the most severe cuts, directors and managers are bearing the greatest decreases and are sharing the pain of dropped income.

 

Working time flexibility

Salary reductions are also being made through the introduction of three day weeks and other flexible working arrangements.

Frequently staff are put on three day weeks to cut costs. This option of making staff work part time needs to be managed effectively so productivity is maintained or increased.

Offering unpaid leave to your staff is a way to temporarily reduce your wage bill. If you are overstaffed at the moment, but expect you need staff in a year’s time when the economy picks up some staff may find the option of unpaid leave attractive.

Introduce customer focused flex-time as a competitive response to the downturn: an organisation’s opening hours could be extended without increasing cost. Implementing flexi-time should have the effect of creating longer open hours. As a customer I would like to see this happening for banks, accountants and solicitors.

 

Remember you are not alone

There are many experienced business advisers out there who will listen, advise and stimulate your ideas and activities.

So ignore the radio and TV reporters who appear to luxuriate in the bad news announcements, and get on with doing the business.

 

This is part of a series of articles on managing a business through the recession by Billy Linehan of Celtar, business and management consultants.

 

Billy Linehan is a specialist SME adviser who has been working with small businesses in Ireland and the UK for nearly 20 years. A director of the Institute of Management Consultants and Advisers, as well as managing a private consulting practice Billy provides a mentoring service to clients of the IMI and the Dublin City Enterprise Board.

 

It seems to be obligatory to have a “humour” section on a blog and I am happy to poke fun at the management consultancy profession.

Let’s get the retaliation in first, consultants can be smug, intolerant and some even display a touch of arrogance – not any consultants I know of course . . . . . . . . .

Here’s a few jokes to lighten our the day in dark times

 

 

 

What’s the oldest profession in the world?

A physician, a civil engineer, and a consultant were arguing about what was the oldest profession in the world.

The physician remarked…
“Well, in the Bible, it says that God created Eve from a rib taken out of Adam. This clearly required surgery, and so I can rightly claim that mine is the oldest profession in the world.”

The civil engineer interrupted, and said…
“But even earlier in the book of Genesis, it states that God created the order of the heavens and the earth from out of the chaos. This was the first and certainly the most spectacular application of civil engineering. Therefore doctor, you are wrong: mine is the oldest profession in the world.”

The consultant smugly leaned back in her chair, smiled, and then said confidently…
“Ah, but who do you think created the chaos?”

 

The consultant and a flock of sheep

A shepherd was herding his flock in a remote pasture when suddenly a brand-new BMW advanced out of the dust cloud towards him. The driver, a young man in a Brioni suit, Gucci shoes, Ray Ban sunglasses and YSL tie, leaned out the window and asked the shepherd… “If I tell you exactly how many sheep you have in your flock, will you give me one?” The shepherd looked at the man, obviously a yuppie, then looked at his peacefully grazing flock and calmly answered “sure”.

The yuppie parked his car, whipped out his IBM ThinkPad and connected it to a cell phone, then he surfed to a NASA page on the internet where he called up a GPS satellite navigation system, scanned the area, and then opened up a database and an Excel spreadsheet with complex formulas. He sent an email on his Blackberry and, after a few minutes, received a response. Finally, he prints out a 130-page report on his miniaturised printer then turns to the shepherd and says, “You have exactly 1586 sheep. “That is correct; take one of the sheep.” said the shepherd. He watches the young man select one of the animals and bundle it into his car.

Then the shepherd says: “If I can tell you exactly what your business is, will you give me back my animal?”, “OK, why not.” answered the young man. “Clearly, you’re a consultant.” said the shepherd. “That’s correct.” says the yuppie, “but how did you guess that?” “No guessing required.” answers the shepherd.

“You turned up here although nobody called you. You want to get paid for an answer I already knew, to a question I never asked, and you don’t know crap about my business…… Now give me back my dog!“

 

Process re-engineering and the string in the waiter’s fly!

Last week, we took some friends out to a new restaurant, and noticed that the waiter who took our order carried a spoon in his shirt pocket. It seemed a little strange. When the sommelier took our wine order, I noticed she also had a spoon in her pocket. Then I looked around saw that all the staff had spoons in their pockets.

When the waiter came back to serve our soup I asked, “Why the spoon?” Well,” he explained, “the restaurant’s owners hired a consulting company to revamp all our processes. After several months of analysis, they concluded that the spoon is the most frequently dropped utensil. It represents a drop frequency of approximately 3 spoons per table per hour. If our staff are better prepared, we can reduce the number of trips back to the kitchen and save 15 person-hours per shift.”

As luck would have it, I dropped my spoon and he was able to replace it with his spare. “I’ll get another spoon next time I go to the kitchen instead of making an extra trip to get it right now.” I was impressed.

I also noticed that there was a string hanging out of the waiter’s fly. Looking around, I noticed that all the waiters had the same string hanging from their flies. So before he walked off, I asked the waiter, “Excuse me, but can you tell me why you have that string right there?”

“Oh, certainly!” Then he lowered his voice. “Not everyone is so observant. That consulting firm I mentioned also found out that we can save time in the men’s restroom. By tying this string to the tip of you know what, we can pull it out without touching it and eliminate the need to wash our hands, shortening the time spent in the restroom by 76.39%.”

“That’s great, but how do you put it back?”

Well,” he whispered, “I don’t know about the others, but I use the spoon.”

How you know when you’re married to a consultant

You know your partner is a consultant when he or she…

Referred to the first month of your relationship as a “diagnostic period”.

Talks to the waiter about process flow when dinner arrives late.

Takes a half day at the office because, “Sunday is your day.”

Congratulates your parents for successful value creation.

Tries to call room service from your bedroom.

Ends any argument by saying, “let’s talk about this off-line.”

Celebrates anniversaries by conducting a performance review.

Gives you a Valentine’s Day card with bullet points.

Refers to lovemaking as a “win-win”.

The Consultant Takes a Vacation

A consultant booked himself on a Caribbean cruise and proceeded to have the time of his life. …at least for a while until a hurricane came unexpectedly. The ship went down and the man found himself swept up on the shore of an island with no other people, no supplies, nothing. Only bananas and coconuts.

Used to 4-star hotels, he had no idea what to do. So for the next four months he ate bananas, drank coconut juice, longed for his old life, and fixed his gaze on the sea, hoping to spot a rescue ship.

One day, as he was lying on the beach, he spotted movement out of the corner of his eye, it was a rowboat, and in it was the most gorgeous woman he had ever seen. She rowed up to him. In disbelief, he asked her:

“Where did you come from? How did you get here?”

“I rowed from the other side of the island,” she said, “I landed here when my cruise ship sank.”

“Amazing,” he said, “I didn’t know anyone else had survived. How many of you are there? You were really lucky to have a rowboat wash up with you.”

“It’s only me,” she said, “and the rowboat didn’t wash up, nothing did.”

He was confused, “Then how did you get the rowboat?”

“Oh, simple.” replied the woman “I made the rowboat out of raw material that I found on the island. The oars were whittled from Gum tree branches, I wove the bottom from Palm branches, and the sides and stern came from a Eucalyptus tree.”

“But…but, that’s impossible,” stuttered the man, “you had no tools or hardware, how did you manage?”

“Oh, that was no problem,” replied the woman, “on the south side of the island there is a very unusual strata of alluvial rock exposed. I found that if I fired it to a certain temperature in my kiln, it melted into forgeable ductile iron. I used that for tools, and used the tools to make the hardware. But, enough of that,” she said. “Where do you live?” Sheepishly he confessed that he had been sleeping on the beach the whole time. “Well, let’s row over to my place, then,” she said.

After a few minutes of rowing, she docked the boat at a small wharf. As the man looked onto shore he nearly fell out of the boat. Before him was a stone walk leading to an exquisite bungalow painted in blue and white. While the woman tied up the rowboat with an expertly woven hemp rope, the man could only stare ahead, dumbstruck. As they walked into the house, she said casually…

“It’s not much, but I call it home. Sit down please; would you like to have a drink?”

“No, no thank you” he said, still dazed, “can’t take any more coconut juice.”

“It’s not coconut juice,” the woman replied. “I have a still. How about Scotch-on-the-rocks?”

Trying to hide his continued amazement, the man accepted, and they sat down on her couch to talk. After they had exchanged their stories, the woman announced…

“I’m going to slip into something more comfortable. Would you like to take a shower and shave, there is a razor upstairs in the cabinet in the bathroom.”

No longer questioning anything, the man went into the bathroom. There in the cabinet was a razor made from a bone handle. Two shells honed to a hollow ground edge were fastened on to its end inside of a swivel mechanism. “This woman is amazing,” he mused, “what next?” When he returned, she greeted him wearing nothing but vines, strategically positioned and smelling faintly of gardenias. She beckoned for him to sit down next to her.

“Tell me,” she began, suggestively, slithering closer to him, “we’ve been out here for a very long time. You’ve been lonely. There’s something I’m sure you really feel like doing right now, something you’ve been longing for all these months? You know… ” She stared into his eyes. He couldn’t believe what he was hearing:

“You mean… ?”, he replied, “…I can check my emails from here?”

END for the moment

The Chinese symbol for crisis contains the symbols for danger and opportunity. With the global economy in turmoil most people are sitting around holding their breath; hoping and praying they will be able to survive the threat. There is no question that this time of change is threatening for us all.

But, this is also a period of great opportunity; one of which is the opportunity to get to know your customers better and to strengthen your relationship with them. Another is to stand out from the crowd, be different in your business proposition – attract interest in your product and service offerings.

Do not be put off by your colleagues, other business people and the general media view – economies and budgets have shrunk to 2003 levels (and it wasn’t too bad then).

Billy Linehan February 2009nehan