Thinking About Starting a Small Business?

It is common for individuals to leave a structured business organization to set up their own enterprise. Motivations vary from personal or family issues, desire to be independent from direct supervision and sometimes a belief that economic independence is readily achievable.
Achieving success as an entrepreneur in a small business has many challenges and here are a few:


• Financing
Perhaps the largest issue facing small business and particularly start-ups is finding the cash needed for working capital and funding growth. Banks prefer a minimum of two years of success to approve operating lines and private financers may not accept the risk often associated with new small businesses. This issue needs to be well thought out and planned so whatever the nature of the business it can survive those initial years of operation.

• Competition
Breaking through the noise and creating demand for your product or service at the start means competing against larger, better financed companies. It is difficult to compete without compromising pricing so new businesses may have to be more strategic and establish more benefits or value in their sales proposition.

• Creating awareness
As a new business the first order of business is creating awareness of your company in the marketplace. Since funding may be limited it is critical to maximize the efficiency of marketing dollars and to create a message that quickly attracts those first customers required to start cash flow into the business.

• Staffing
As a small business it is often difficult to attract top talent. First it is difficult, unless well financed, to afford the most qualified employees and potential candidates may be reluctant to join a small company unless it has a track record of success that can ensure a stable environment for the employee.


These are a few of the issues small business face but they can be overcome by being creative and agile in responding to marketplace opportunities.

Let me know what you think: gerry@polarisgroupmc.com

Strategic planning vs Strategic thinking

Conventional thinking suggests all businesses should develop strategic plans and business plans to help direct the business and facilitate successful growth.
Strategic planning sometimes impedes strategic thinking and dims real vision. The most successful strategies are visions not plan details.

One option to formal planning is for companies to adapt Strategic Thinking. Fast growing companies need to take advantage of challenges and opportunities and turn their size into an advantage.

- Plan informally on the go. All big ideas don’t have to come from formal strategy planning offsite. Quick huddles with key team members to examine key issues are effective.

- Challenge. Brainstorm to ask “why not” when faced with the inevitable “that won’t work”. Test whether initial negative positions are really valid.

- Make small bets. Large companies with major investments at stake may do exhaustive analysis before acting. Smaller companies can develop and test new potential strategies by making smaller bets by discussing an idea with a customer before the item is built, seeking out a potential supplier that is trustworthy, or discussing the idea with another person with expertise in the area.

These are some options available for strategic planning; the important issue is to make the process fit your organization. Be sure to take some action, sitting on the sidelines while competition takes the business should not be an option.

Let me hear your thoughts.
Gerry@polarisgroupmc.com

Improve Business Growth

There is always interest among owners in taking their business to a higher level. It is more than the tired cliché of “work smarter and harder”. As an owner, your ability to think clearly, analyze, and make good decisions are keys to your profitability. Many factors are involved in attaining growth and here are a few thoughts to consider:

1. The Product Must Satisfy a Need
The first principle to consider in selecting any new product or service is to determine if it fills a genuine, existing need that customers have right now. A new product or service must solve a problem of some kind for the customer or make the life or work of the customer better in a cost-effective way.

2. Boost R&D
Times are not going to remain down indefinitely. When the next “up” wave comes around, you want to be ready with new solutions for the market. This is when weaker companies scale back on R&D and smarter companies invest in their future.

3. Cash Flow Is Essential
Especially with a small business, you must hold onto your cash as a drowning man would hold on to a life preserver. Cash is the lifeblood of the business. Cash flow is a critical measure and determining factor of business success. Successful entrepreneurs install careful financial controls and monitor them daily. The basic rule for entrepreneurial success is this: only spend money to earn money. The basic rule for running your business is "If it is not revenue, it is expense!"

4. Maximize Your Marketing
Perhaps one of the most important principles for business growth is strong momentum in sales. This requires an emphasis on marketing that permeates the entire organization. Everybody must think about selling and satisfying customers all day long.
What's the purpose of a business? Some people say that it's to "make a profit." But this isn't correct. The true purpose of a business is to "create and keep a customer." Profits are the result of creating and keeping a sufficient number of customers in a cost-effective way. All emphasis has to be on creating and keeping those customers.

5. Engage your employees and listen. Your employees can be a goldmine of ideas. They know your customers, your market, and your operations. Actively encourage them to come up with ideas to improve revenue generating operations, product innovation, cost cutting measures, etc., and listen to them. You’d be surprised at the level of ideas you’ll generate simply by asking. This also gives your employees a great sense of inclusion.

Please let me know if these thoughts provide some insight into growth opportunities. What do you think?
gerry@polarisgroupmc.com

How Networking can pave the road to improved results.

Having a network of business peers and associates can be invaluable in resolving business issues, sharing relationships and helping each other in a group.



Network opportunities can provide:

• A setting to meet new contacts in a casual, less business, more social environment.
• A way to volunteer in organizations and gain visibility while giving back to those who may help you.
• Ways to meet people across different business streams that may have resources that can help you achieve your own goals.
• An opportunity in group discussions to pose open ended questions that can provide additional information you seek and stimulate responses that show your interest in the group.
• An opportunity for you to be a discussion leader and that adds respect for you and a chance to be perceived as a leader.

If you extend efforts to become more involved with a variety of networks there can be a significant payoff in terms of support you achieve in developing your new business opportunities and contributions you can make to others without jeopardizing your own business goals.

Look for groups to join that can expand your knowledge base and your business. Take no opportunity to network lightly – strive for excellence.

Cost Savings = Cash Flow

All business owners should constantly look for ways to reduce costs in order to improve cash flow in the business. Cash conservation allows you to generate reserves that can be used for unexpected emergencies.

Here are a few thoughts to consider for improving cash flow:

1. Lease equipment.
This avoids the upfront costs when there is a need to purchase equipment. Leasing agreements sometimes include maintenance so you will reduce costs repairing and maintaining older equipment.

2. Review banking.
Watch for creeping bank fee increases. Meet with your bank manager and work to reduce monthly service fees and interest on operating lines. This can save a significant amount monthly.

3. Go Paperless.
Make the effort to reduce paper within your own operation by converting documents to e-copies. This will reduce storage and handling costs. Also offer customers electronic invoices and save the cost of printing and mailing to your customers.

4. Collect cash in advance.
If you offer credit terms, try collecting part of payment in cash up front. This not only improves cash flow but reduces risk on any receivable.

5. Review operations.
In place of staff reductions, consider eliminating unnecessary tasks or product content. Functions should add value that customers are willing to pay for. If the value cannot be measured it cannot be managed. Cut out waste and preserve cash.

These are a few suggestions for saving money that can be put in place and provide benefits of improved cash flow.

Need to Improve Management Skills?

Perhaps it is time to review your management skills with the view to improving overall operations of the business.

Here are a few thoughts on fundamentals to review:



1. Be open to new ideas.
The best managers are flexible and welcome new opportunities. Be a good listener because many of the best ideas for operational improvements come from employees closest to the work.

2. Preach excellence.
Set goals high but not unattainable and expect employees to meet them. At the same time demand excellence from yourself and staff will be more likely to stretch to meet important goals.

3. Communicate clearly.
With the setting of high standards, ensure employees’ job objectives clearly reflect them. You will be rewarded with well-conceived, measurable employee objectives.

4. Focus on time management.
Time is an underrated but critical management asset. Mangers are frequently interrupted to put out fires. The most successful managers protect their schedules and time carefully and prioritize, delegate, and spend their time thinking carefully of the key issues.

5. Deal with conflict.
Conflict in an organization is inevitable. There are no shortage of interpersonal issues, compensation, recognition, cost-cutting, and other day to day problems to handle. Tempting as it may be to ignore any issue the best managers are not “conflict –avoiders” but deal with issues quickly and fairly. Employees respect managers who confront difficult situations and work to resolve problems.


Managing is at times complex but the development of fundamentals can provide the foundation on which to build daily operations.

These are a few thoughts. Please let me know what you think: gerry@polarisgroupmc.com

How do you manage your time?

Do you feel the need to be more organized and/or more productive? Do you spend your day in a frenzy of activity and then wonder why you haven't accomplished much?
Time management skills are especially important in small business where owners often handle many responsibilities.
Here are a few tips to increase productivity and to stay calm and cool throughout the day.

1. Time management myth?
No matter how organized you are there are only 24 hours every day. Focus on managing yourself and what you do with that time.

2. Time wasters.
It is easy to be side tracked and waste time “surfing the net”, reading emails, making personal calls. Track your personal time so you can see where the focus of efforts are and how to improve time usage.

3. Plan.
Develop a plan to focus on changing behavior not changing time. Start with eliminating personal time wasters like taking personal phone calls at work. This will help improve productivity and reduce stress.

4.  Prioritize.
Start the day with prioritizing tasks and benchmarking performance. If you have a list of 20 items, how many must be done that day?

5. Delegate.
Every effort should be made to have others share the work load. A review of activity will help determine what can be delegated or outsourced and allow you to focus on priorities.

Remember, time is one of the resources business owners have that is scarce, cannot be replaced once spent, and it cannot be borrowed or purchased. Manage it judiciously.