Four Common Business Mistakes to Fix Now

Fitting together the pieces of your business puzzleWhy 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.

Epilogue

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.

How Not to Suck at Using Social Media to Build your Business

Social mediaMost entrepreneurs and small-business owners wear several hats in their companies by necessity.  They'll perform many of these functions well, and it rarely takes long for them to recognize the handful of roles at which they really suck.

Now, knowing what you suck at and working around the issues your "suckiness" creates are two different things.   If you're lucky enough to have the resources to hire people to do those things at which you're no good, your lack of expertise in these areas usually means you're equally "sucky" at  evaluating whether or not your candidates for "replacement" are any good, either.

Which brings us to the main point of this article.  The use of social media platforms for commercial purposes has really exploded in recent months.  Twitter, Facebook and LinkedIn are the most popular platforms leading the charge.  Many of the entrepreneurs and business owners I encounter proclaim (and often with a hint of pride) that they "suck" at using these sites, expressing extreme bewilderness by their popularity ("I just don't get it" is a very common refrain).

Not wanting to be left behind, these same business men and women seek out others to "get their businesses on" Facebook or Twitter.  And therein lies the problem.  Not only do these business leaders lack a solid understanding of what needs to be done, but they have no way of assessing whether the people they've called in for help are any better qualified to deliver.  So in the interest of helping you to not suck, let's start with some basics.

Why should a business use social media anyway?

Social media is but one item in the chest of tools businesses can utilize to communicate with their customers and build their brand.   That said, the reason you want to use this tool is because a business that 1) invests its time in this arena wisely, and 2) uses the right social media tools and platforms will :

  • improve its accessibility to both existing and potential customers
  • become more "human" and "personable"
  • build its reputation
  • enhance the public's trust
  • strengthen long term connections
  • increase sales and referrals

Almost every type of business can benefit --  restaurants & cafes, retail stores, and professional service providers (attorneys, accountants, real estate agents) to name a few.

I still don't get it...

If you don't "get" anything else about social media, then at least "get" this -- it's all about connecting with other people.   Human beings have an unquenchable thirst for making personal connections.  Our commercial relationships are no different.  So if you don't want to suck at using social media to build your business, just treat your efforts as you would in building any long term, human relationship.  And for those of you just getting started, here's our take on the fundamentals :

  1. The first thing you should do in connection with any business initiative (be it around social media or otherwise) is to develop a clear definition of what you're hoping to achieve.  The second item on your list should then be to determine how you're going to measure progress (or lack thereof) toward your goals.  If you're just starting off, it's a good idea to keep things pretty simple.
  2. Identify the social media platforms your customers (and potential customers) are using.  It's not going to do you or your business any good to master Twitter when everybody you want to connect with is devoting the bulk of their social media interactions on Facebook.
  3. Next, look at what your competitors or others in your industry are doing.  Which platforms are they on (Facebook, Twitter, etc.)?  What types of pages or other presences have they built, and how are they using photos, video and other media in these sites?  How many "fans," “friends” or "followers" do they have?   This little exercise will not only make you familiar with each of the relevant platforms and how they are used, but also start sparking some ideas about how you might want to do things.
  4. While you're on those platforms checking out your competitors, don't forget to search for conversations or activity around your own business name.  Whether or not you've been part of the conversations, there's a good chance that somewhere in cyberspace people have been talking about your company.  Start to think about how you are going to monitor and, when appropriate, join in those discussions (on this note, there are a couple of quick things you can do to make this easy -- check out services like Google Alerts and BackType for starters).
  5. Develop a plan around how you're going to engage your audience.  Though you're ultimately looking to increase revenues, your social media presence is rarely about making those sales, it's about building connections that eventually draw customers into your pipeline.  So think about how you're activity on social media sites is going to educate, entertain,  or otherwise help the people you're looking to connect with.
  6. We never forget that time is money.  So at a minimum, you should do several things to tie together and cross-market the various social networks you’ll most likely be using. Here are 2 quick suggestions along these lines:

    First, consider linking activities across your profiles.  There are various ways to have Twitter, Facebook, LinkedIn and others update one another.

    Second, if you're maintaining a blog (which you should be), then be sure to incorporate your work here across all of these platforms where your target market is spending time.  Again, there are many ways to accomplish this.  LinkedIn, for example, allows users to embed blog feeds into their profile.  Tools like ShareThis enable readers to quickly share content on multiple social networks.

Finally, just dive in.  And as the Genie said to Aladin, "be yourself."   There's a lot more to be said, but we're not looking to write a tome on this subject.  If you're interested in learning more, we're moderating a workshop on November 17, 2009 in conjunction with the Hopkinton Chamber of Commerce, and welcome your participation (learn more here).   Otherwise, we're always happy to chat on this subject, so feel free to drop us a line.  Either way, we hope this gives you a better handle on how not to suck at using social media to build your business!

s2Member®