if you're a small business owner, you probably spend a lot of time working on tasks and projects that fall outside of your strongest skill sets. sometimes the reason for this is a lack of money. other times the reason is a desire to drive every aspect of your business. regardless of the reason why this happens, know that spending too much time on things you don't do well usually results in massive inefficiencies and is guaranteed to stunt your company's growth.
so how do you get over this hump? like many things in life, the answer is simple, but the solution is a little more involved...
for every business task that stretches one of your talents, I can guarantee there are no fewer than 25 people within a 2 mile radius of where you currently stand / sit / lie that can do one of these tasks better and faster than you. the challenge you have lies in finding the right talent, then creating a manageable and sustainable method for bringing this outside help into your operations. here's my list of key considerations for this process ::
what if i can't afford to hire outside help?
many business owners honestly believe their company's cash flow simply won't support the hiring of outside help. rarely is this truly the case.
if you diligently execute on each of the considerations listed above, the resources you bring into your operations should quickly pay for themselves (you should actually come out ahead). the challenge, once again, lies in budgeting the time, talent and energy it takes to invest in this process. you do have some other options.
first, if you're not already doing this, get out and network with your fellow business owners. learn to be purposeful in your networking, however, so you're not simply spinning your wheels (this is another article for another day...)
[WARNING :: watch out for the passing reference to one of our service solutions]
second, join a co-working community. even if you're a retailer, every business function is not performed on the sales floor. co-working locations can have dozens of different businesses of varying specialties and focuses all under one roof. accountants can find marketers to help them promote their services. developers can find lawyers to help them sort through contracts and licensing issues. there's no better environment for evaluating a service provider, and you'll have countless opportunities to share, barter or charge for your own services.
[WARNING AGAIN :: now watch out for a shameless plug]
finally, you can give us a call here at main street ventures. we're passionate about working with small business owners, and specialize in creating the "connective tissue" that's needed to make "main street" businesses both sustainable and profitable. in fact, we're so confident in our approach that we guarantee our work will pay for itself.
Why is it the arrival of an arbitrary point on the calendar prompts most of humanity to reflect on their past and resolve (for a short time anyway) to change their ways? Though I'd like to believe personal and professional resolve should not be limited to such a narrow window of time, I'd be swimming against the tide on this one. So, in the spirit of "if you can't beat them, join them," it seems a particularly appropriate time to share some relevant observations about our clients (and even ourselves) more than a few of you will recognize and potentially resolve (there's that word again) to do something about.
Most businesses have reacted to our economic downturn by hunkering down and cutting costs. While cost-cutting is certainly critical during times such as these, it's equally important for companies to seize the strategic opportunities such troubled times put in our laps. In particular, the opportunity to strengthen core products and services in order to emerge from this morass ahead of the competition.
Having worked in both large corporate and small business environments, one universal truth we've encountered (regardless of the company's size or "sophistication") is that every organization stands to derive substantial value from making better use of its own, untapped operational and "institutional" knowledge. Helping companies change this reality is one of the major values our firm brings to its customers. Only by obtaining a better handle on your own data can you truly leverage information into better decisions. And better decisions ultimately leads to improved sustainability, scalability and profitability for your business.
So, hoping we might inspire you to make better use of your own assets, here are 4 common "business intelligence" mistakes we see businesses making on a regular basis. Are you one of them?
1. Failing to Recognize and Correct Problems
In today’s economic climate, no organization can afford to let internal business problems linger. In order to correct problems, however, you must first be able to identify them. Once identified you then have to prioritize -- only then can you focus precious time and energy on resolving those which are most crucial.
It is probably easiest to see this issue in the context of project delivery or new product development. Is your business more reactive than proactive in these scenarios (such as failing to take action until a project or product is drastically behind schedule or significantly over budget)? A common source of this problem can be traced to the manual tracking of project or program status. This not only wastes time and money on an ineffective approach, but hampers your ability to identify and correct problems before they arise.
Good business processes will serve as "early warning" systems, helping to identify issues that fall outside the norm and signal potential problems. For example, take a company that is experiencing an increased Time to Revenue (the time between the date you close a new customer deal and the date you actually begin receiving revenue). If this company is making good use of its own business intelligence, it should be able to pinpoint whether the cause is a one-time delivery issue, a pervasive problem in service delivery, or a simple administrative glitch (such as a wrong address on an invoice). Once the source of the problem is identified, it's fairly easy to take some kind of corrective action.
If your problems are never recognized, you run the risk of repeating them time and again. Don't let this happen. Resolve to undertake a real examination of your operations. Find ways to monitor and track meaningful benchmarks. Make sure you are alerted to recurring problems (such as when a process or action falls outside the scope of acceptable ranges). Technology can help here, but only if it is driven by a solid understanding of what moves your business.
2. Perpetuating Poor Workflows and Operations
In order to control the cost of delivering your goods and services, it's essential to find ways to eliminate inefficiencies and waste. The longer poor operations persist, the greater the pressure placed on your gross margins.
Large public companies that consistently maintain high market values share a common trait -- they tend to generate a 10% EBDITA margin or better (that's "Earnings-Before-Interest-Taxes-and-Depreciation"). By containing their expenses to deliver a cash flow–positive business through all sorts of market cycles, these companies flourish in good times and bad.
There's a lesson for companies large and small here. Maximize your business's value by finding ways to collect and evaluate key information flowing within your own 4 walls. Then make sure you put this timely "intelligence" into the hands of key decision-makers so you can act on it. Even if you're a one-person show, the sooner you have a process for capturing your "business intelligence" in a meaningful way, the better off you will be.
3. Taking your Existing Customers for Granted
Compared to the cost of acquiring a new customer, the expense associated with cross-selling or up-selling products and services to existing customers is almost non-existent. Why is it, then, that so many of us neglect our existing customer base and the information it contains?
Over time we gain a better understanding of our customer's needs and behaviors. The more proactive we can be about staying in tune with our customers and their needs, the greater our ability to increase both loyalty and sales.
Do you have a simple and effective way for identifying your top customers based on profitability, size, or potential? Are you communicating with your past and existing customers, if only to remind them about the products and services you provide?
If your customer and sales data is located across different software applications, it's probably difficult for you to access relevant information and create an overall picture needed for valuable insight into their behaviors. Thankfully, there are a variety of data integration and cleansing tools available to bring all this information together, and you don't necessarily have to spend a lot of money (or time) setting things up (or learning how to use and maintain them). "Dashboards" and other visualization tools will help make your data more accessible and understandable, visualizing trends or other factors you might otherwise have missed. You can then act on this information and target your communications effectively, benefiting both you and your customers.
4. Failing to Capitalize on Opportunities
During tough economic times the most successful businesses remain focused on the future -- there are always short and long-term opportunities to identify and evaluate. In order to seize potential opportunities with confidence, you simply need a process that will give you the facts and analysis you need to make an informed decision.
Now here's where the previous 3 "mistakes" come into play. If you no longer suffer from these problems, then you already have most of what you need to act with insight. By utilizing measurable knowledge points from your own operations, you can now generate "what-if" analyses that model the operational and financial impacts on revenue, costs and cash flows. Based upon the range of potential outcomes for the opportunities you evaluate, you can select and prioritize the most promising scenarios with confidence.
Instead of simply reacting to economic challenges, position yourself for competitive advantage by building an efficient, performance-based organization that knows how to make the most of its own "knowledge." How you use the technology you have (and select new technology going forward) can play a large part in your success here. The good news is you don't have to be the size of Proctor & Gamble or IBM to benefit from this, nor do you necessarily have to invest a lot of time or money in the process. You simply need to make a commitment to yourself and to your business. Now that's not so hard a resolution to make, is it?
Jack Speranza is a principal of Main Street Ventures and has been helping businesses small and large harness the power good operations & technology for over 15 years. If your organization would like to do more with less, we're ready to help.