Monday, April 28, 2014

Is Communication a Strength in your Business? 

Communication is the foundation of every single relationship you have in your personal life; it's no different in business. Without effective communication, there can be misunderstandings, problems and conflicts among your staff, your clients and everyone else you come into contact with. Poor communication can make effective delegation, productivity and an enjoyable work environment virtually impossible.
Here are a few ideas that may help.

1.     Listen
Listening is the key to effective communication and it helps to limit distractions during conversations. Turning off cell phones, email, or even closing an office door can help ensure the speaker has your full attention.

2.     Respond Promptly
In business it is important to respond to requests quickly. Even if information is not immediately available respond quickly with a promise to follow-up. Check voice or messages at least once a day. If a customer has to wait longer than 24-48 hours for a response it is likely you will lose the business.

3.     Ask good questions
When you want to persuade someone, questions can be more powerful than statements. The reason: you engage another person more strongly. You get him or her thinking about the ideal answer – and the steps necessary to get there.

4.     Hold Effective Meetings
Meetings are notorious for being time wasters if they are not well organized. The first thing you should do to respect everyone's time and make your meeting as efficient as possible is to schedule it in advance. Then, take time to prepare an agenda that outlines focus points and sets a structure for the meeting. Take notes and capture important elements of the meeting and send the summary to participants. This will confirm the time well spent.

Effective communication can be important to your business success. It may be worthwhile taking the time to reinforce practices in your organization to ensure improved results. I hope these suggestions help.

Tuesday, April 22, 2014

Start-up Issues to Avoid

A high proportion of new business fail in the first few years. Here are a few mistakes you may want to avoid and enhance your chances of success.

Lack of cash reserves
One of the reasons why so many small businesses fail within the first few years is NOT because the business model isn’t viable or the entrepreneur isn’t “good enough” to make the business work, but it’s the fact the financial ramp up time is sometimes longer than expected. As a result companies simply run out of money to support the business and/or owners before the business is profitable enough to sustain itself.

Optimistic assumptions
Many newbie entrepreneurs fall into this trap. They have a great idea, they jump into the fray only to realize there were a few not-so-little details that they failed to consider or a few areas where their assumptions were overly optimistic and before they know it, that “no-brainer” business is hanging by a thread.
Be honest with yourself. Are you underestimating the time required to get the first client? Are you overestimating the demand for the product? Are you assuming zero risk by not allowing for what could go wrong?
No test run
Not everyone incorporates a business model into their planning.  It’s so easy to get really excited by the concept of your business, but it’s quite another thing to put pen to paper to help you objectively evaluate your overall business model and its profit potential.  The simple truth is that having a great idea is just a start – it doesn’t necessarily translate into a profitable model.

Doing it all to save
If you try to do EVERYTHING yourself, you’ll not only run yourself into the ground, your business will suffer, because you don’t bring sufficient expertise in every area.  Your time is money. Think about where you must personally invest your energies. Should you be developing and refining your content, products and services, cultivating relationships with key clients and stakeholders, developing credibility within your industry?  No one can do this for you.
That said, others can develop your website, handle your public relations, and perform random administrative functions. Utilize them.

Poor pricing strategy
Pricing too low or too high can both create negative results. Too low may create an impression of lack of quality or service; too high may simply be uncompetitive. Check to see what others are charging. It’s much smarter to offer value pricing initially and then raise prices over time.  In many cases asking clients for their budget will not only give you an idea of what to charge, but it could minimize the risk of severely underpricing or over pricing your product or services.  You may also consider providing different pricing options to increase the likelihood that you’re offering something within your client’s price range.

Perhaps there is a germ of an idea here that fits your situation and helps avoid traps that can threaten the business.

Monday, April 14, 2014

Business Failure or Failure of Leadership?

Why do businesses fail? If you strip away all the excuses, rationalizations, and other justifications and drill down you may find the major reason for failure is poor leadership.

Here are a few reasons businesses fail and how leadership failure is key

1. Lack of Vision
It is the role of the CEO to clearly define and communicate the corporate vision. If there is no vision, a flawed vision, or a poorly communicated vision, the responsibility falls squarely in the lap of executive leadership.

2. Poor Branding
A poor brand generally means leadership has failed. Brands fall into decline for only one reason – leaders have abdicated their responsibility. They have allowed their brand equity to erode, and failed to deliver on the brand promise. Leaders who don’t steward their brand as one of the greatest corporate assets deserve the fate that awaits them.

3. Flawed Strategy
A flawed strategy simply reveals weak leadership. While there are exceptions to every rule, companies tend to succeed by design and fail by default. Show me a company with a flawed strategy and I’ll show you an inept leader.

4. Lack of Capital
Sometimes well capitalized ventures fail miserably, and severely under-capitalized ventures eventually grow. Raising, deploying, and managing capital is ultimately the responsibility of leadership. The amount of capital required to run a business is based upon how the business is operated. If leadership operates the business without consideration for capital constraints, or irrespective of capital formation issues, then the blame should fall squarely on the shoulders of leadership.

5. Isolation from Advice
Nobody has cornered the market on knowledge and wisdom. If leadership doesn’t seek out the best quality advice available to them, they will likely not make the best decisions. All CEOs and entrepreneurs need top quality professional advisers. When a leader has a “miss” or a blind-spot, he or she is simply showing the arrogance of operating within the limitations of their own thinking and poor results may follow.

There are many other reasons for business failure and I hope this stimulates thoughts that may prevent your business from failing. Let me know your thoughts.

Sunday, April 6, 2014

Keys to Effective Business Management

Management of any business has a great many challenges. There are strategies that can be used to improve management skills and produce better results.

Plan strategically
Business owners often make strategic decisions with long term impact in the spur of the moment. This can be counter-productive, particularly in an environment of fast growth. Develop a Strategic Plan to force a review of the company’s current position, hurdles to cross, and a plan of action to follow.

Broaden the customer base
Don’t rely on a few major customers. High volume customers are great the business can be very vulnerable if competition steals the business. Stay in touch with key customers to meet their needs.

Manage profit margins 
You should review gross profit margins on all products frequently. Why retain products in the mix that are poor performers.

Plan cash flow
It may be a good idea to keep cash management in house rather than with an outside accounting service. Daily cash outflow and intake should be tracked. This important tool can help keep tabs on the business and help you respond quickly when needed. Build trust and credibility with your bank manager by keeping him/her up to date.

These few ideas I hope provide insight in ways to improve your organization. Please let me know your thoughts.