Archive for category business knowledge

The biggest challenges Businesses face today

What are the biggest challenges businesses face today, was the question posed to members of the Business Exposure Group at a recent meeting, and below are the 10 most pressing concerns.

According to the CBI change is the new normal.

Growing revenue is the top challenge for businesses employing 5-30 employees.  Hiring employees is the biggest challenge for businesses with 30-50 employees and government regulations becomes the biggest issue for business with 50 or more employees.

What are the 10 big challenges for SME’s.

  • Uncertainty about customer trends – does this lead to short term focus, and does it make you feel vulnerable?
  • Financial Management – cash flow. Larger customers are imposing long payment terms, so how are you addressing this?
  • Monitoring performance – are KPI’s as good as they sound even though they compare historical information or are there better ways.
  • Recruiting the right talent – employee working flexibility is important to retain good staff, but increasingly stress in the workplace is a real challenge in small businesses when staff have to be able to multi-task.
  • Technology – it should be outsourced to reduce demand on administrators, but is investment in technology an asset or a handicap. Distinguishing which technology will attain the highest return in terms of time and investment is a problem.  The big issue is, is the IT fit for purpose.
  • Information overload. There are now big digital challenges for meeting the expectations of customers, together with finding and keeping people who can digitally transform a company that delivers a bespoke customer experience.
  • Customer Service – what is the right level, are customers’ expectations too high? Managing the relationship is key
  • Maintaining reputation – there is genuine concern about reputation management with easy access to social media and particular concern about cyber security disrupting the day to day functionality of the business.
  • Knowing when to embrace change is a worry and knowing how to balance quality with growth. Businesses are stocking less and relying on a lean supply chains, but is this clever or does it open up crippling disruptions.
  • Regulations and compliance are becoming more and more demanding of staff time

Everyone was in agreement that running a business is getting harder and is forever challenging, but all were motivated about the challenges and were ready to face them head on.

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Being small in business – does it make your business bigger?

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.

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Do we need a formal business education to be on top of our business in 2015?

The current business environment is characterised by increasing competition, global trading, technology and the need for enhanced operational efficiency.  Yet we are faced with fewer staff undertaking a diverse range of complex activities.

Small business failures can often be attributed to poor management competences – So why do we have varying degrees of resistance to training?

The following comments were made at a recent Business Exposure Group meeting:

  1. Do staff take training seriously, or is it a day out of the office. Most thought that training only works well if you have a willing participant and that when they return to the office they are able to use their new skills and communicate the benefits to their colleagues.
  1. SME staff are often forced to be a jack of all trades in order to plug the skills group, which in the medium term is not sustainable.
  1. There can be fall out from training because the recipient my wish to move on to better opportunities which the SME cannot accommodate.
  1. Training at the lower level is fundamental because a business is only as good as its weakest member of staff.
  1. Many small businesses are between the rock and the head place. On the one hand desirous of a training benefit but on the other hand finding the absence of a colleague from the ‘day job’ as detrimental to the ongoing daily requirements of the business.
  1. Business education for the owner is less a job of sitting in a classroom, but rather by learning on the job with the aid of an expert coach, which will assist the owner in breaking through the glass ceiling created by their limited experience of how to move their business to the next level. A well experienced industry relevant ‘Non Exec’ is the answer for many of our members who have ambitions to significantly grow their business.

Training budgets throughout a business must be proportionate, so that both staff and the owner take equal priority to train and therefore build a strong, resilient business.

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Clearing dead wood and converting it into success.

How many of us have dead wood in our businesses?

It’s actually about moving a load of people.

The big challenge business owner’s face is that we need to shift non-performers or the blockers in the business. We need people that are more innovative and in touch with the demands of customers. People who will do it cheaper than some of the more senior staff.

But a question was raised at the Business Exposure Group meeting as to whether they were under performers when you hired them or did they become so once they started working? Did you have a role in creating that dead wood? Something must have happened and the business owner must take some responsibility.

Owners who don’t understand that they must create a management system that allows people to think, create and act are failing as leaders no matter how visionary. But how do you make staff feel they have a career with you? How do you put a plan in place to make people realise their future is either with you or not!

It is important to energise high performers – they love to perform. Provide them with relevant training and get out of the way, because they don’t like meddlers. Keep them doing things they like doing and always celebrate progress.

If you have made a mistake release weak hires and disgruntled employees as soon as possible, because
– they are unlikely to get better
– they take up everyone’s time
– they delay the hire of recruiting a quality replacement

One of our members pays off weak hires to leave within the month because he believes the
damage they can cause with clients is immense if they are not on board and enjoying working for the business.

Yet few businesses actually employ ‘managing out’ tactics.

Staff statistics show – 48% don’t like their job / 80% feel stressed / 30% feel engaged /18% are actively disengaged, ie present at work but hating it.

So what causes disengagement was relayed around the table at the meeting with the
following comments made.

a. Micromanagement saps the life out of us and causes apathy at work – it tells an employee that you don’t trust his work
b. Lack of progress – too much red tape, to many unnecessary rules
c. Job insecurity – no confidence in leadership
d. Poor communications
e. Unpleasant co-worker (people with a best friend at work are 7 times more likely to engage with the business)
f. Boredom

Many believe that a constant turnover of staff is inevitable in business and fresh blood is good and not a problem and that once dead wood has been released a tremendous honeymoon period of camaraderie and productivity hits the business. The secret is keeping the honeymoon period for as long as possible, to take advantage of the opportunity to develop the business.

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UK manufacturers urged to come along to our round table meetings

We are delighted to see that there is good news for UK manufacturers, as according to recent figures from the Markit PMI (Purchasing Managers Index), the sector is beginning to stabilise after it had declined in recent months.

But if you run a traditional manufacturing business, where do you go to get advice or bounce ideas off other business owners?

Philip Drazen, heads up the Business Exposure Group and thinks that his round table events could be just what manufacturing business owners need. “Business owners who attend our meetings are always glad they have attended.  They gain an insight from someone, who perhaps isn’t in the same industry, which can give them guidance and support.

“The meetings also offer an opportunity for business owners to swap success stories and ask about challenges they may be facing within their business.”

As it stands, these discussion groups are constantly expanding, assisting and creating a positive outlook for all businesses involved in the Business Exposure Group.

If you run a manufacturing business and would like to attend one of their informative round-table discussions in either Manchester, Leeds. Wetherby or Sheffield, please contact philipdrazen@bxgroup.co.uk

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Business Discussion Group gives business owners “A Board of Non-Executive Directors”

A business discussion group in the North is racking up praise from directors and business owners across the region for its highly concentrated business advice, and has been compared to “like having a board of non-executive directors on your side.”

The Business Exposure Group (BXG), run by entrepreneur Philip Drazen, operates meetings across the North ten times every month, and is exclusive to business owners and directors of all ages from all sectors. Philip chairs the meetings, ensuring every forum thoroughly covers a range of topics that are important to the business owners around the table.

Recent topics of discussion include “Recruitment – Tips and Best Practice,” “Funding an acquisition,” and “Cloud Computers – The risks of not owning your data.”

Some of the discussions are truncated and posted onto this blog, which provides everyone with the chance to see what sort of advice is being generated from the events.

Speaking about the benefits of the group, Philip stated: “Business owners operate today in a varied and complex world. As an owner you are expected to have all the answers, but it’s impossible. What makes the Business Exposure Group different is that it is purely and simply a straight talking, no nonsense, English concept, which provides a safe, secure and trusted environment for business owners.”

One member was particularly eager to share her thoughts on the group, commenting: “[Philip ensures] everything gets done, we cover everything on the agenda and he keeps control of the group with a smile so that it goes like clockwork. Joining the group has been a good move, I have done business through the group, made great contacts and it gives the opportunity once every 5 weeks to take a birds eye view of your business. Very useful.”

Another member simply stated: “[The Business Exposure Group] is a valuable resource providing an excellent sounding board for business issues. Philip runs these well and has interesting and useful insights into the problems raised.”

If you are a Director or business owner and would like to attend one of their informative round-table discussions, please contact philipdrazen@bxgroup.co.uk

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Scaling up your business or steady growth – Which is appropriate in 2013?

There will inevitably come a point when, in order to stay alive, you’ll need to expand your business.

But with the crowded market and the economy in its current state, which is more appropriate a strategy in 2013 – scaling or steady growth?

The key thing to remember is that there is no set checklist for whether your business should scale up or use steady growth – it’s all highly circumstantial, and crucially about timing, and trial and error.

For example, Steals.com and Groupon are both daily deals sites, with the former working on the steady growth model and the latter scaling up quicker. Groupon had a meteoric rise followed by a steep decline, whereas Steals.com enjoyed a steady rise in business and website traffic, and is currently the more successful.

“I’m all for scaling successful business models, but I wonder if our desire for immediate gratification and big payoffs is blinding us to more solid, long-term return on investments.”

“You want steady growth because you can measure it, you can repeat it. You want steady because steady produces a flow of data.

  • Steady lets you A:B test.
  • Steady lets you learn
  • Steady takes the emotion out of decisions and we all need that.”

On the other hand, entrepreneurs often build companies from scratch and over the course of years, build a massive business. Scaling a company to that size requires a few key components:

  • Risk and reinvestment of money
  • Attracting and retaining key employees
  • Sharing success with employees and contributing to their personal growth
  • Surrounding yourself with intelligent people who have great ideas and advice
  • Having incentive-based compensation in place to reward employees for hard work and dedication
  • Expanding your market to other cities and countries
  • Luck

So, with all that in mind, how do you know if your company is scalable, outside of trial and error?

Firstly, success isn’t about growth, which is adding resources at the same rate as adding revenue; it is about scaling, which is only making small increases in resources. That said, scaling is much about staying alive as is it is ahead, because your competition could find that silver bullet to scale their business.

In order to find scalable aspects in your business, you must first find aspects that can be replicated very quickly. If your next scale requires just as much time and effort as the one prior to it, then your business is not scalable.

Three common mistakes that are made are to not:

  • Realise that customers are not the same as users
  • Recognise that first users are not the same as scaling users
  • Anticipate that first products are not the same as scaling products.

Finally, to make the scale as manageable as possible, consider these points:

  • Document all procedures, and have an accountant to help keep everything under control and on-record
  • Learn how to measure – trial and error only works if you know where you are going right and where you are going wrong
  • Maintain a database – the less information stuck in your head the better off your business will be
  • Manage working relationships so that you can maintain a personal touch as you grow
  • Segment and delegate responsibilities
  • Prepare your family – there will be a reduction in leisure time

Above all, be mindful that scaling your company requires a very different skill set than what is required to build one from scratch. It’s a bit like building a skyscraper – you can’t get to 100 stories just by stacking single storey homes on top of each other. You need better foundations and infrastructure to make it work.

This article was taken from a discussion of the Business Exposure Group.

If you are a Director or business owner and would like to attend one of our informative round-table discussions – held across the North of England, please contact philipdrazen@bxgroup.co.uk

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How valuable is business knowledge and support in this climate?

As Business owners and directors, we all have a variety of challenges facing us on a daily or weekly basis.

Some of these issues fit comfortably into our own sphere of expertise and we know instantly how to deal with them.

In many cases however, we come across issues that may need another level of expertise and maybe our own experiences don’t provide the solutions that we seek.

It is at times like this when we would ideally turn to an instant network of advisers that we had to hand, to whom we could turn – and more importantly, trust, to discuss our business issues with, without fear of the discussion being repeated elsewhere.

One place to find a perfectly acceptable solution to this dilemma is The Business Exposure Group who hold regular invitation only round-table business discussions across the North of England.

The groups are made up by approximately a dozen business owners and directors from a range of different sectors who discuss selected issues around the table.

These discussions are chaired and strictly controlled by a very experienced and knowledgable lawyer and businessman who gets maximum value from the event for all participants.

It is, in effect, like having a group of experienced non-executive directors around your boardroom table who each have their own individual talents and experiences which they bring to the discussion.

The benefit of sitting at the table for any business, can be considerable and one guest commented that, from a business point of view, “It was the best three hours that he had spent in the last five years”.

Praise indeed for the Business Exposure Group and I can also add my opinion which is equally flattering:” The high calibre of the participants and the incredible value of the discussion are equally matched by the potential business that you gain access to through the participants at the table”.

If you would like more information about how you may be able to attend one of these discussion groups in either Manchester, Sheffield, Wetherby or Leeds, please email Philip Drazen via email at philipdrazen@bxgroup.co.uk

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Due Diligence – Consider which Customers to do business with.

Modern business is dangerous. It constantly demands us to trust people we have never met before over services, time, and money. A good handshake just isn’t enough to guarantee legal security. People are not rigorous enough, which is why the need is greater than ever for due diligence.

One tool out there that can help is the website www.duedil.com which allows you to follow suppliers, competitors, and clients. The website provides free company information, including director’s backgrounds and allows you to compare business with their rivals. Currently, users from 75 of the FTSE 100 companies are using this service to conduct due diligence on counterparties, daily.

However, when Duedil can’t help there are other ways to satisfy your risk assessment.

All of the considerations involve an investigation of either a business or person prior to signing a contract. But remember, you have to ask yourself how much of this may be overkill. Everyone’s boundaries will be different.

Working with a Customer

These are steps that can be taken in the name of due diligence when working with a customer.

  • Take steps to indentify your customer- checking they are who they say they are, is more than just for banks and solicitors. Make sure your contract is with the correct trading entity.
  • Only offer credit to companies 3 years old with a one-year sound payment history.
  • Trade referees- get individuals from both sides to vouch for each others reliability and worth.
  • Asking for overall sales volume, so that you can see what risk the value of the order represents.
  •  Check their credit score.
  • Use Google to track their story.

This article was taken from a discussion of the Business Exposure Group.

If you are a Director or business owner and would like to attend one of their informative round-table discussions, please contact philipdrazen@bxgroup.co.uk

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Customer Satisfaction – What state of mind do customers have of your business?

In modern business there’s increased competition, crowded markets, lesser product differentiation and flatter sales.

So measuring customer satisfaction is key. It reportedly costs five to eight times as much to get a new customer than to hold onto new ones.

So why not operate a measurement system for customer satisfaction and find out what your customers expect from you?

Firstly, don’t just watch sales volumes or rely on a sales rep determining your customer’s state of mind. Also, don’t just track the frequency of complaints or look at ageing debt.

Implement a survey via mail, e-mail, or over the phone and rate experiences on a weighted scale (1 out of 5 etc.). Ensure to repeat this process to see how your customers experience changes over time.

Consider these factors:

  • Who is responsible for implementing a system – sales and marketing.
  • Management must champion the initiative.
  • Compare your own customer satisfaction with your competitors.
  • Engage all employees.
  • Inform your customers about the changes made due to the survey. Its  important to communicate.

Satisfaction can be based on:-

  • Quality
  • Business relationship
  • Price
  • The Service and Product meeting or exceeding customer expectations

Did you know? A 5% increase in loyalty can increase profit by more than 25%.

A very satisfied customer is six times more likely to be loyal than a satisfied customer.

Only 4% of dissatisfied customers actually bother to complain, and on average that same dissatisfied customer is likely to tell nine other people about it.

In comparison, satisfied customers will tell five other people on average about the good treatment they received.

You also need to consider the following:

  • Are your products less than advertised?
  • Are employees making promises they can’t keep?
  • Do you know why customers prefer another brand over yours?
  • Do you get customers to compare and contrast?
  • What is the technology expectation? – E.G. Mobile phones are constantly evolving.
  • Conduct a Customer Satisfaction Survey on a regular basis and look for:
  •    Overall satisfaction: How satisfied are you with ……
  •     Loyalty Measure: Would you recommend us to…
  •     Intention to repurchase: Do you intend to repurchase…

Here are 6 thoughts for putting together a customer satisfaction programme:

  1. Who should be interviewed? The end user, the manager or the directors or all?
  2. What should be measured? Put yourself in the customers mind-set – what do they consider important?
  3. How should the interview be carried out?
  4. How should satisfaction be measured?
  5. What should the measurement mean?
  6. How to use the survey to the greatest effect?

It’s debatable whether these should be anonymous or not.

Another strategy is to identify the best company in your sector and set your benchmark against them.

There are links between customer satisfaction and employee satisfaction as happy employee’s work harder, providing greater customer satisfaction.

If a survey is right for your business, then your customer will in-turn expect positive changes to come from it. Most surveys just sit gathering dust. Be sure to communicate quick wins. The newsletter can be a good starting point and turn your customers into very satisfied customers.

This article was taken from a discussion of the Business Exposure Group.

If you are a Director or business owner and would like to attend one of their informative round-table discussions, please contact philipdrazen@bxgroup.co.uk

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