Business Growth

Growth through acquisition of a customer

 

Should You Buy One of Your Customers?

Evaluation of this option for growth can be complicated and it is important to measure risks, costs, and benefits. Here are some of the issues to be evaluated.

1.     Synergies

This question is central to any strategic transaction. But besides the usual synergies (overhead reduction, facility consolidation, etc.), buying a customer that sells to another customer can often allow you to capture the margin they are charging their customers. Depending on the customer dynamic (distributor vs. additional service), this margin can be substantial.

2.     Operational and Strategic implications

Buying a customer can often open up an entirely new client base or new market for your business. Make sure you have the right expertise, the right people and the right infrastructure in place to handle the change; otherwise, you're likely to upset your new end customers. It's critical to anticipate and understand potential new challenges such as sales channel conflicts.

3.     Consequences of not acquiring

If you don't acquire the customer, will your competitor do so? And does that put your volume at risk? If the customer is selling because of financial distress, do you need to step in to make sure you don't lose significant sales?

4.     Negotiating Strategy

If a customer is a large enough part of your business, you run the risk of a) losing their business if the negotiations fall apart, or b) having the customer use the leverage of their business to get what they want out of a deal. You have to remain cognizant of how important the customer is to your business and what its alternatives are if it doesn't sell to you.

Businesses must be diligent when considering any type of acquisition. The questions outlined here are important when your acquisition target is also one of your of your customers. No one wants to lose a good customer, and with the right plan, strategy, and transaction structure, you can turn a potential loss into an increase in the value of your business.

Business Management

Prioritize to improve Success

Here are a few tips on setting priorities in order to improve your overall results in business:

1.     Prioritize tasks:

It is easy to be overwhelmed with a bunch of tasks that need to be done. Interruptions from emails, office distractions, telephone calls, and different tasks happening throughout the day. The key is to separate what is imperative from what is not. Complete activity on the most important tasks first rather than trying to working on several tasks at once. Delegate secondary tasks.

2.     Block your time:

By focusing on one task at a time, you tend to get less scattered. That may mean letting calls go to voicemail or logging out of your email account. I often find that when I get interrupted, I not only become less productive on the task I work on but I get distracted and start thinking about all the other things I have to do.

3.     Take Breaks and Reconnect:

Taking a break from work is essential to regroup and refuel both mentally and physically, but I find that when I haven’t checked email for an hour, I prefer to see what’s come in. When you have certain things turned off like your phone or are logged out of email, make time periodically to go in and check for messages.

4.     Refresh:

Whether you go for a jog at the end of the day or make a lunch date during the middle of the day you may find that a real break helps. Not only in the morning or at the end of the day, but in the middle. If your break is to do some chores and that helps you refocus, great.

If you focus and are conscious about what you need to accomplish and set priorities you will be more effective in achieving overall results.

Business Management

Tips for Effective Time Management

Assume you accept the premise of the statement: “More time allows me to make more money”.  How then can you maximize productive time? Here are a few tips:

1.     Eliminate the unnecessary.

Eliminate activity that prevents you from reaching your particular goal. If you have a deadline to make at work, don’t spend 25 minutes per day fielding unnecessary phone calls. Put simply, you need to draw a firm, distinct line between the “necessary” and “unnecessary” in your day. The stricter you define these terms, the more you’ll find that a lot of things are truly unnecessary and can be set aside.

 

2.     Plan your day.

If you go into work every day having no idea what you want to accomplish, then you’ll probably accomplish nothing. Set aside ten to fifteen minutes before work and either write down or mentally plan what you want to accomplish. You may plan work each morning as you are driving in to work. These several minutes spent planning contribute more towards being productive and effective than anything else that you may do. After you decide what you want to accomplish, then execute the plan.

 

3.     Multitask

If you have the talent to multitask, great, use it. However if you do not have that skill don’t waste time starting many projects and finishing none. Know when to multitask and when not to.

 

4.     Minimize interruptions.

Eliminating interruptions is difficult but you can control how you deal with them. Accept interruptions but if you are working on a priority project advise your employee that you will deal with the issue later. At times that boss may interrupt, but I guess that presents a new priority!

Summary

No matter the level of your position, more time allows you to accomplish more. Preparation, organization, and discipline provide the tools to increase your productivity and hence improve income.