Archive for category business discussion
Strategic business reviews are useful if you are
- uncertain about how well your business is performing
- if you want to know how to get the most out of your business or marketing opportunities
- if your business is moving in a different direction to the one you planned
- if the business is becoming difficult or unresponsive to market demands
But what are the questions we should be asking ourselves?
Members of the Business Exposure Group discussed these questions and came up with the following.
- If things are running well should you let it run or is it actually time now to plan again? Most thought that it should be a constant agenda item.
- A simple planning cycle can greatly enhance your ability to make changes in your business routine.
- It is vital to review the progress of your business, but how are you measuring success and is your annual business strategy fit for purpose? Most thought that a review should take place every time a game changing event happens.
- What are your markets now and in the future and how do you gain market advantage? There is no point in going head to head with the competition, try to find a niche.
- Which of your products/services are succeeding and which are not performing as planned? Spend more time on the latter.
- How effectively are you marketing your goods/services to your customer’s needs? Have you reduced the risk of them placing an order with you?
- Conduct competitor analysis. Find out what they offer. How they price their products/services. What is their competitive advantage. What was their reaction to your entry into the market. Who are their biggest customers. With this information your business can be more robust and targeted.
- How often do you review your financial position? Have your requirements changed recently? How frequently do you review costs and new ways of doing things? These questions are crucial.
- How often do you review and update your website? Don’t let it sit there reflecting the old times.
There is a benefit to have an outsider question your thought processes periodically. They will ask questions that you never even thought of. There will be many external factors which may affect your business’s ability to compete and it was generally felt amongst our members that is was vital to review your business periodically, especially if legislation changes, new technology is introduced, a significant customer is lost or a new competitor enters the market. It has to be a disciplined ongoing process.
Most business owners dream of growing their company. Greater revenues are a measure of accomplishment. Larger companies are trusted more and getting bigger makes it easier to get even bigger!
But, being big creates problems – the business becomes less flexible, less customer centric and all the aspects of being small are jettisoned: agile, frugal and responsive. So, can you stay small but continue to grow? This was a question posed at a recent Business Exposure Group meeting. It’s important as the business grows to keep thinking like a small company. So, consider:-
- Does adopting the formal trappings of a large company in order to appear more credible actually reduce performance?
- Employees function better when the rules and procedures are short and simple.
- Adding more staff often creates more problems, and it increases staff turnover.
- Working with fewer people creates conscientiousness and keeps everyone more involved.
- Employees wherever possible should be rotated between tasks, so everyone can multi-task.
- Decisions take longer to make in a large company. There are too many managers who create bottlenecks.
- Do we need constant regular meetings? There is often a mis-alignment between when meetings are scheduled and when a conversation is needed. So, be more flexible. Big businesses have too much reporting, too many meetings, too much training. Create a culture of action and hire people who get things done!
- Customers are happier when there are fewer layers of management and procedures. Several layers of management depersonalises the customer experience.
- Eliminate useless work practices, don’t issue a companywide rule that only applies to a few – eg everyone must write a report, but it’s only relevant to one employee who doesn’t communicate well.
- As the business grows the agenda will change, make sure everyone is working to the same project. Don’t let people continue on old projects when the needs of the business have changed. There is nothing quite so useless as doing with great efficiency something that should not be done at all
These points were raised at the Business Exposure Group meeting. It was felt that keeping teams small and agile with little bureaucracy, a flat organisation and smart employees was the appropriate model for a contemporary business.
E-Commerce is the name for any kind of commercial transaction that takes place through the internet. It gives customers the ability to buy from you without having any limitations imposed by time or distance. Its not restricted to a B2C business using a “shopping cart” and credit card.
The question is – are B2B customers ready for this?
This was the topic discussed by members of the Business Exposure Group at a recent meeting and some interesting observations were put forward by members, many of whom had implemented E-Commerce functionality into their businesses.
B2B suppliers know far more about their customers than B2C, so there is no excuse not to deliver relevant experiences to your customer.- a website should no longer be general but nowadays it needs to be specific to the customer browsing your site.
41% of manufacturers are now selling directly to your business customers, so your business needs to be prepared to sell against the same companies you consider as valuable supply chain partners.
Entering into the world of E-Commerce is a major decision and setting up your website is challenging. Consider the following points raised by our members during the meeting:
- Website needs to be user friendly with as few clicks as necessary to enable your customer to order as easily as possible. It should load within 5 seconds.
- Do you require multiple “shop fronts”, different languages, to only provide relevant products and services to the specific visitor?
- Does your website need a reminder email facility to remind your customer to re-order?
- Does your website need an email facility to notify your customer about new products or when products are back in stock?
- When logged into the website, does it recognise your customer and automatically bring up their previous order history? – It is important to segment customers and give them a different experience based on their industry requirements.
- If you have a complex catalogue, direct customers to the relevant products in as few clicks as possible?
- Should you put all your goods or services for sale on the website or leave the high end items for your sales team to sell?
- FAQ’s section is extremely important as it reduces the need to have an extensive customer relations team.
- With one click specific industry users can fill their ‘carts’ with everything they need for their particular requirements.
- It engenders customer loyalties. An order can be authenticated with a click of a button, instead of the process taking several days to be confirmed.
- It streamlines your ordering system. It reduces the bottle necks of tedious work.
Consider who is your real competition, your competitors or your customer expectations?
The buying experience is now more important than ever.
It was felt by the Group that B2B E-Commerce was certainly another route forward for most businesses and a great way to find a new customer base.
Successful outsourcing means more than just picking the right supplier. It’s now a mainstream strategy, it’s an indispensable part of small business operations.
But, what do you outsource? – IT, Human Resources, Wages, Training?
Should you avoid outsourcing areas of your business that directly impact your customers?
For example, is it better to outsource IT to one supplier or to contract with a few suppliers and choose the best one for each type of work? Failing to outsource effectively can cause damage to your business.
Outsourcing was the subject discussed at the Business Exposure Group meetings recently and members engaged in a lively discussion as to the benefits and pitfalls of outsourcing.
Successful outsourcing achieves:- cost reduction / achieving KPI’s / reduced time to market / process improvements / business agility / increased innovation / commitment to change with enthusiasm.
However, research shows that 15% of business owners think that outsourcing delivers reduced services, poor quality, and costs more when management and overseeing are factored in, and there is evidence of a high failure rate in outsourcing. The biggest hurdle to overcome is that the contract or piece of work must be commercially significant to the supplier, if the buyer is to receive an appropriate level of service.
Businesses can’t be as efficient in this day and age if we handle all tasks internally. But what is crucial to overcome the high failure rate is to have some sound service level agreements detailing: the minimum service offering / dealing with on time delivery / the volume of work / and the suppliers availability if your business needs a quick fix.
Time invested in managing outsourced relationships is time well spent but when choosing suppliers for outsourcing consider the following points:
-How do you get suppliers to collaborate with your established functions?
-How difficult will it be to swap outsourced suppliers?
-How often should you meet with suppliers?
-Lay down your terms of business clearly and set clear goals with service level agreements.
-What attitude should you expect from your supplier? They must show
a passion for excellence, rather than just satisfaction
commitment to success
take ownership of the work
bring brainstorming to the table
go above and beyond the contractual expectations
-Can you invoke penalties for failures in service / delivery
If you choose suppliers well then you will have a great resource, which is about much more than just saving costs. It’s about skill, innovation and giving your business a competitive edge.
The simple way to expand your business is through hard work, there is no short cut to growth. However, growth through acquisition maybe appropriate for small and medium sized companies looking to achieve rapid expansion.
What do you think of when you want to grow your business?
- Catch your competitors off guard
- Instant market penetration
- Eliminate a competitor through acquisition
- Is rapid growth too risky in a fast moving business world
- Will staff cope
So, is organic growth too risky in our fast moving business world? This was a question raised at a recent Business Exposure Group meeting.
It is easier to finance growth via acquisition than other routes of expansion. Lenders are more impressed with real financials than projections. Banks prefer to finance acquisition rather than projected traditional growth.
Ask yourself – does acquisition complement our services/does it align with who we are and what we want to become/does it enhance our profile. For a business to be well positioned for acquisition it needs to be doing well, have a strategic business plan, a strong management team and access to capital before the deal takes place. Is your foundation sound enough to acquire? Will your key employees stay?
Acquisition is about getting skills and technologies faster or at a lower cost that they can be built from scratch. Acquisition is even better than having a super-charged sales effort.
Acquisition is lower risk – expenses are predictable, but how do you find a company who wants to sell?
1. use your accountant/lawyer
2. contact the owner direct
3. look for people around retirement age
4. direct networking with business owners
With organic growth businesses, growth should be restricted to 5-20% per year. So acquisition assists to go beyond that with control.
If you don’t have the money to buy
- use the seller’s assets
- buy with someone else
- lease with an option to buy
- assume liabilities or decline the receivables
One of the Business Exposure Group members who acquired last year said ‘Keep the businesses separate for 18 months and let the teams develop – if buying the business, but if buying the talent then integrate them into your business quickly before they leave. Respect the existing product and/or services otherwise the newly acquired team will feel embarrassed and worthless’.
According to KPMG, on acquisition 15% of staff leave. If more than 15% this will affect the DNA of the team that you have just acquired.
The discussion at the meeting finished with an agreement that time should be set aside each month to work on the business and consider if an acquisition should be targeted, but note that acquisitions usually stem from the sellers desire to get out rather than the buyers desire for a purchase
To create distinctive customer experiences, businesses need to push the boundaries and adopt next-generation thinking in six key areas.
Some companies are moving fast to adapt, applying a range of approaches to improve customer experiences. A great experience that delights customers and earns their loyalty is needed. Improving a customer experience from merely average to something that wows the customer can lead to a 30/50% increase in measures such as likelihood to renew or to buy another product.
Here are six areas discussed at a recent Business Exposure Group meeting.
- Measure customer behaviour and spend time with customers to understand them
Companies need to empathize with customers when they experience difficulties and obstacles.
This means embracing new techniques for understanding customer journeys. Such approaches allow companies to uncover new insights that allow them to design and deliver truly great customer experiences.
One of our Business Exposure Group members is an insurance broker specialising in the farming community. He was developing a new product and took time out to observe the daily activities of farmers.
He learnt that farmers are pressed for time but also very tech savvy, relying heavily on PCs and mobile devices in their daily activities. He had originally planned to market his new product through traditional channels, but lessons learned from an observation trip led him to create a digital solution, which allowed farmers to gather information and buy policies online at night and at weekends.
- Designing the complete customer experience
Design is not about making devices and screens look pretty. True customer-experience design involves each interaction customers have with your company. Design is not just what it looks like and feels like. Design is how it works.
To design a customer journey, companies must enlist everyone who has an impact on any part of a customer’s journey, not just people with the word “design” in their title—in particular operations and IT.
A Business Exposure Group member has a marketing agency whose client specialises in visitor attractions. After a 12 month effort to root out pain points in the experience of visitors to theme parks, their clients introduced wrist bands. These brightly coloured wristbands allow visitors to board rides, pay for meals and gifts. More important, the bands and the technology behind them—which is in every part of the attraction—allow visitors to select exactly what they want to see and do in advance. That has helped turn a day out from a series of highlight attractions interrupted by waiting in line to a smooth end-to-end experience.
- Completely rethink the customer experience
The focus is addressing customer needs, not improving a process. Many of our members bring in people who are not normally involved in the business to encourage fresh thinking. Looking at the best experiences employed in other industries can be extremely enlightening.
- Become an agile organisation
Managers responsible for developing new offerings need the authority to make decisions quickly and to hold staff accountable.
One of the Business Exposure Group members who has an IT software company shifted entirely to cloud technologies, which allowed new software developed by their team to go live on the clients websites in a matter of seconds. By making the whole organisation agile, the IT company dramatically reduced time to market for their clients products and services.
- From delivering a product to constant tweaking
Many businesses figure out what new product or service offering they want to create for customers and then launch pilots.
It’s impossible to know in advance how an experience will be embraced by customers. It’s better to launch sooner with fewer features and a simpler interface and learn what works, based on real customer input.
Using this approach, one of the Business Exposure Group members was able to build a new tablet-based app in just 6 weeks. It then tweaked new versions based on user feedback, improving the process. After these tweaks, the app was scaled across new markets and more products within the company’s range.
- Working together spontaneously
Companies need to push their people to move beyond traditional roles and work together to reinvent customer journeys. Improvements come from having motivated, empowered frontline employees driven by clear purpose.
Many of our members are working hard to reinvent their customers’ journeys. The ones that win will be those that push the boundaries and adopt new practices.
Sales functions are struggling in the internet led world. Approaches that have worked for decades are no longer effective and many businesses have seen their digital investments fail to deliver expected results.
The importance of a sales strategy was discussed at a recent meeting of the Business Exposure Group and it led to a lively discussion with lots of questions being posed.
Do you have a sales strategy? – You can’t sell here and there, or pick up the phone when you have a spare minute. Strategy is about making choices, about where we play and where we don’t. Unless you have a solid strategy you are essentially flying blind.
Do you understand the sales process? – It’s not about money, you need to focus on the positive impact the product or service has on your customer. Forget about hitting the numbers, make sure the right message gets through.
Your CRM system maybe hurting your cause. Seeing the top 3 products your customer is interested in is far better than looking at the customer history. Will your customer benefit from doing business with you rather than your competitor? Explain to them why you are the best, why your product/service is better and try to create a bond so they will stay loyal.
Do you find yourself trying to get business without understanding the specific growth opportunities? – Define your ideal customer, know your USP, analyse your territory, know your competition and have realistic sales expectations.
Many companies think they have a sales strategy but they don’t.
One of our members got it very wrong. He has a machine tool business selling to the automotive trade and he decided he wanted to break into the medical market where there was more business at higher profits. The strategy was to bring in a new line for the medical industry. He revamped the website, had new brochures printed and then nothing happened. They hadn’t worked out how they were going to be accepted into the medical market, how they would train staff and what exactly they were selling, who to, which companies, etc.
One of our other members got it right. They are an accountancy practice who wanted to target independent haulage contractors for business. They found it was no good expecting hauliers to come into the office during the day as they were busy working. The company defined a sales strategy offering home visits accounts preparation for hauliers and they now have 420 new clients from that niche industry sector.
How much time should you spend on planning a sales strategy? You need to consider some of the following points
How do you move from being pretty good to very good at generating sales growth
- Take time to analyse problems then work out what your strategy needs to address
- Change your mind-set to ensure you are better than your competitors
- Ensure you are persuasive, but not arrogant or pushy
- Always talk to the decision maker and build a relationship, get in early
- Create a sense of urgency for their order, what can you offer them as an incentive to commit early
Management Consultants McKinseys have researched the SME market place and concluded the top 5 strategies for SME businesses:
1 Find growth where your competitors could not – practice micro segmentation of the market and find a pond where no one is fishing
2 Sell the way customers want to buy – focus on prospects for which you have something original to offer
3 Free up your sales people to sell – get rid of excess admin
4 Focus on developing staff
5 Expect exceptional performance – set stretching targets
Members who attended the Business Exposure Group Meeting left feeling energised and with lots of thoughts to focus on.