Organisational Needs

What is the organisation trying to accomplish or avoid? These can be categorised as:

• Strategic—The need to increase revenue and growth. The need to expand into a new market. The need to reduce expenses. (Not a strategic or marketing plan or a cost reduction analysis).
• Technical—The need to have their servers up and running at all times. The need to operate more efficiently. The need to launch a new product. (Not a new monitoring service or time / motion study or new logo).
• Financial—The need for ideas on how to become more profitable. The need to sell the business. The need to improve sales results. (Not a tax return or valuation or sales compensation study).
• Political/Environmental—The need to bring a new acquisition into the fold. The need to allow a new store to be built. The need to avoid bad publicity. (Not an employee survey or a grassroots campaign or a series of press releases).

Individual Needs

What is influencing the individual or individuals who will decide to engage our services? These are the needs that are often unspoken and less obviously connected to our services. While you cannot always uncover these types of needs directly, by being aware of what may be going on, you can be alert to the obstacles that can keep you from connecting your services with your prospects needs.

• Professional—To get a promotion. To prepare for a new job. To become well-known. To gain experience in new areas. To do a good job.
• Social—To impress the neighbours. To be accepted and respected by peers. To have a nice place to hang out.
• Psychological—To avoid risk. To take risk. To have someone to talk to. To please the boss. To gain recognition.

Determining Your Client Needs

How do you uncover your clients’ true needs and position your services in a way that fulfils their organisational and individual needs? I suggest the following exercise to get you thinking about how your clients view your services and how you can define them in terms of your clients needs.

1. Bring your key principals, partners, or business developers together for a brain storming session.
2. Think of all the clients you currently have. Why did they seek you out? What needs did they have that caused them to look for a service provider?
3. Think about the last sales conversations you had. How did your prospects speak about their needs?
4. Try to use the words that your clients and prospects use, not the marketing speak you use to describe your services.
5. On a flip chart, write all the needs that you have down the left-hand side.
6. On the right-hand side, write the services you provide.
7. Connect the needs to the services. Which ones satisfy the most needs? Are there any needs you have listed for which you have no services? Should you have those services?
8. Develop the questions that will help you uncover these needs in future conversations.
9. Continually refine and reshape your needs list as you engage new conversations and new clients.
10. Repeat the process as needed.

So, the next time you are asked what your clients need, you will be prepared to answer with the real reasons they seek out your services. You will make better connections, develop stronger relationships, and most likely find new clients in the process.

This is an interesting statistic as it indicates that there could be a flood of businesses for sale with no potential buyers for these businesses in the near future. Why do I say this? Well, many of these smaller businesses that do ok for their current owners may not be up to modern business systems and practices. What I mean by that is that the potential buyer will be looking at businesses that have proper business systems set up as well as the potential for growth.

In the area of business systems it would be important for buyers to know how things are done in a business and that these aspects are documented. For example, how are  purchases of products ordered, received, distributed, etc. Another example may be what marketing system has been set up and how effective is it? Any potential purchaser of a business wants to know that the systems work and that they are efficient. New buyers want to spend more time generating new business than fixing or installing systems into a business.

No purchaser of an existing business would want to buy a business that has no upside potential. It is therefore important to identify markets that can potentially be tapped for future prospecting. If these markets can be easily identified then there is potential upside for the aspiring new owner and a potential increase in the selling price of the business for the owner.

To get around these issues it is important that business owners plan for their succession now and not once they have decided that it is time to change their focus. I have an on-line questionnaire that can help business owners understand the issues surrounding their business and help them identify them so that they are ready to sell at the right price. Contact me now to find out more.

But “Tibor” I hear you say ” how can I be more effective in my marketing if I have so much work to get through?”

Well it is all about setting up a system or systems of finding the right customers you wish to serve and then setting out to get them. This is done by way of your marketing plan and – system so that you have some involvement but not overwhelmingly so.

It is generally assumed by the public that professional services firms deliver a quality job so how do you make it easier for them to decide to choose you?

Here are some common errors that professional services businesses make:

1. Unrealistic expectations for the marketing tactic used and results obtained.

2. Spending money on campaigns that are “vanity exercises” or don’t produce ROI.

3. Relying on one tactic only, e.g. local paper advertising.

4. Lack of decision making to implement marketing tactics.

5. Poor implementation, e.g. weak copy

6. Not sustaining a marketing effort over the longer period.

7. Not communicating value in their marketing pieces.

8. Not nurturing leads or dropping them.

9. Poor planning for lead generation.

10. No or poor marketing integration tactics.

These errors can often be overcome with a proper plan and implementation process. This process, if implemented well, will ensure that you will always have clients and more importantly, the clients that you want.

For more on professional services firms growth, please call or e-mail Tibor Mackor. if you would like a free copy of our 101 Marketing Tips and Tactics for small businesses then please send us an e-mail at tibor@bbstrategies.co.nz.

Take the three primary financial components of your business:

• Sales
• Cost of Goods
• Overheads

Increase Sales by 5%

You may ask “How do I do that?”

There are three main methods of increasing sales:

• Increase  your customer base
• Increase the amount they spend
• Increase the times they return

If you could increase each one of the sales areas by only 10% over the next 12 months, you would increase sales by a strong 33%.  For example, if a customer came in to your store 10 times per year, and you or your sales team could encourage them to visit one more time in that year, there is a 10% increase. If they buy a $10 item and you up sell, cross sell or add on sell a $1 item to them that is another 10% increase. So achieving a 5% increase in sales is not that difficult. Increasing prices is normally a method  simply to keep up or ahead of inflation.

Reduce Cost of Goods by 5 %

You say “No way, that is too hard”.

How well have you negotiated your current purchase price of your products? What package deals have you arranged? What payment system have you organised to reduce costs? Have you joined or established a local buying group to increase your buying power? There are many more ways of making small changes to save the costs

Reduce Overheads by 5%

Too difficult?

When was the last time you as a business owner sat down and seriously pulled your overhead costs, contracts and agreements apart and searched or negotiated for alternatives, explored all options, and attempted to save in these areas of the business?

The key message to business is that there is a large amount of hidden profit within your organisation.  Explore these three areas and improve them by 5% and you will gain an increase in profit by over 60%.

As a business owner it is well worth taking one day out of your busy schedule to work on your business and not in it.

If you want to change your business and future around then call Tibor.

I too have found that this fisrt point is relevant. Many businesses have a lack of direction. This means the failure to establish clear goals for each part of the business and invariably no business plan.

Now you say “but I know where I am going and I have a business plan but am still struggling”

Well, perhaps the plan is old, not updated or not reviewed regularly to suit current market conditions or it may be the wrong plan for the business. You need to know what each part of the business is to achieve and have reports to monitor the progress of each part.

The next mistake is impatience. Here many businesses try to do too much too soon. One example may be spending too much on advertising and not enough on building a customer base. I have found that it takes up to twice as long and it costs almost three times as much as originally estimated to achieve a goal.

“Now hold on a minute!” you say. “I have been patient all the time, I need to get the business growing!” Well, yes you need to grow the business but it needs to happen in an orderly fashion or else you may find that you sign up people for your product or service and find yourself inundated and can’t keep to your promises. The alternative may be true too in that you spend all the cash on ineffective and unmeasured advertising and wonder what went wrong?

The third mistake is greed. Here businesses try to charge too much in trying to become wealthy without building a market reputation. I recommend that making a reasonale profit in the beginning and raising your prices as demand for your product or service increases is the better way to go.

“I am entitled to a reward for my efforts and capital invested” I hear you say. I agree, but while the business is still building a reputation in the market place and competitors are lurking around each corner, then you need to moderate your expectations and grow the business and your income as the business becomes a market leader over time.

Another mistake in business is insufficient working capital. Many businesses rush off and think that they are in business but don’t plan for the costs, taxes, capital expenditure, etc. and suddenly find that they have run out of money. Here it is important to have a business plan so that many of the costs can be anticipated and planned for. In addition, the plan will program potential capital expenses in the future which leaves you time to negotiate with finance companies, if required.

“How do I access additional capital?” you ask. There are still lenders out there who are prepared to finance aspects of your business provided they are happy that the business has a solid plan and growth strategy in place. If necessary, I have access to several lenders in the market to whom I could refer business owners.

The fith mistake, poor quality of product or service. It will be difficult to sell your product or service initially and impossible a second time. Poor quality will make it hard for you get paid what you have sold initially. I think that businesses need to establish quality controls so that a good product or service is provided in order to build up a reputation in the market place.

The sixth mistake, poor cost control. I have found that many businesses spend too much, especially in the beginning. A business needs to retain as much cash as it can because a business will no longer survive if the cash is gone.

“But costs keep rising in this day and age!” so you tell me. Some costs are fixed and others are variable. The fixed costs like rent, etc. are difficult to alter. However, the variable costs can be and here it is important to ask the question of every expense, “is this necessary and is it going to help create greater profits?”. Without the curbing of costs it will become impossible to stay afloat in business.

The seventh mistake is insufficient sales. When the sales team loses momentum and management is too busy operating a business the businesses loses money! Sales must be the priority in any business and all other aspects must come second. This where I have found many businesses lacking the clarity of being in business.

I hear you say that all these aspects have or are affecting your business performance. “What can I do about it”? Well, it is all in the planning of where the business is going. If you do not plan each phase then you may as well sit on a rollercoaster and pray that you have more ups than downs.

Contact us if you have any of these issues. We offer a top service in order to rectify many business “mistakes”.

This is a continuation of my “Why do some businesses grow” series. Improving your business systems (Part 1), Leadership skills in your business (Part 2) , The importance of Marketing (Part 3)

This week I will share with you about the importance of making sure there is sufficient capital available.

By “Capital” I mean working capital or sufficient liquid funds to enable your business to operate as it needs to.

The diehards might be saying or at least thinking, “I don’t need any more capital” my business is just fine as it is. And that might be so.

However, humour me for a moment and imagine if you had an additional

If $2 million dollars were available for investment in your business – what would you do with them?

I have listed a number of suggestions below:

1. Would you invest in additional buildings (or perhaps your own building)?
2. Would you invest in capital equipment? What equipment and why?
3. Would you open another branch of your business elsewhere?
4. Would you make your business more equipment intensive rather than labour intensive? (Are their productivity gains to be had? And what would be the annual wages savings?)
5. Would you expand into a new market within your industry?
6. Perhaps you’d invest outside of your present industry?
7. What about investing in additional marketing campaigns?
8. Or engaging additional staff – say Business Development Managers – to assist in the growth of the business.

What additional things would you do that are NOT listed above?

Now I am not talking about just blowing it all on indulgences like travelling around New Zealand or the world.

However, there is no reason why you wouldn’t or couldn’t use the capital to better prepare your business for sale so that you maximise your return on investment and then can take that well deserved break.

I mean you do have an exit plan or strategy for your business don’t you?

Now for many the exercise is only hypothetical. However if you treat the exercise seriously you may well uncover creative ways of approaching your business that you had not thought of before.

OK Tibor, so now I have thought of all these ideas, IF only I really did have the money.

So how do you go about accessing additional capital?

There are many ways and it is not my purpose to give an exposition on capital funding options as it is outside the scope of this article.

Nevertheless if you are in need of capital and you want to explore the traditional sources, by all means drop me a line, and I will connect you with professionals in my trusted network that specialize in all types of finance and capital raising.

That said there are often a number of overlooked sources of capital or cash within businesses.

Take a good close look at your operations and you will often uncover mountains of hidden cash that is lying untapped and unproductive in your business.

I can hear you say, “Tibor, you can’t be serious?”

I couldn’t be more serious.

For example, IF You could increase your Net Profit by 61.75% that would give you additional cash flow which could either form all or part of the capital required or enable you to service a debt facility that provided the capital required – would it not?

Clearly the answer is yes.

So, Tibor – how do I increase my Net Profit by 61.75%?

You can do this by implementing street smart strategies that

1. Increase your Sales by 5%
2. Decrease your Cost of Goods Sold by 5%
3. Decrease your Overheads by 5%

Now Tibor – you are teasing me (yes I am) – what strategies are these?

These are strategies that my clients appreciate and benefit from because they have invested in the street smart marketing, business coaching and/or consulting services of Better Business Strategies – Business Growth Specialists.

(You didn’t really think I was going to spell it all out for you did you?)

The good news is that you too can make a positive choice to engage external expertise that can greatly impact the profitability, productivity and ability of your business to access to capital it requires to go to the next level.

If you need any assistance with the above the please contact me.

Final questions for today:

If there was one primary obstacle you could remove from your path that is hindering your businesses growth and prosperity – what is it?

And what are you now going to do to get it out of the way?

Next time I will round off with the final article in this series on the 5 Growth Limiters.

Call us now is you require help in this area.

For clarity I am talking about street smart marketing skills and a cohesive, integrated, well thought out marketing plan that aligns with your businesses strategic and operational objectives.

Most business owners acknowledge the importance of these skills on an intellectual level. Yet when one examines their business, the picture is often very different.

Why is this so?

Well the reasons are many and varied and include:

1. Business is family run and they may not have the expertise to identify the businesses requirements in the marketing area.
2. The view of marketing is restricted to a limited number of media or channels e.g. Yellow Pages and TV ads.
3. The “marketing budget” is insufficient or “does not really exist or worse is seen as an overhead instead of an investment to further growth and profitability
4. There is no cohesive, well thought out marketing plan. It’s just fly by the “seat of the pants” decision making.

So you may ask, “Well Tibor, where do I start? I feel so overwhelmed and it seems such a big task.”

I recommend developing a Marketing Plan.

The purpose of this plan is to develop strategies and tactics to sell your product and services to your target market.

There are many important elements of a good Marketing Plan.

These include (list not meant to be exhaustive):

1. Your Goals
2. Your Unique Selling Proposition (USP) or Unique Buying Advantage (UBA)
3. Your Target Market – do you know who they are?
4. Market Research – this should underpin/confirm the strategies and tactics you propose. Your research should include the qualitative and quantitative. Remember – the numbers tell a story and they don’t lie!
5. Articulating the Benefits (not just features) to your target market
6. Your Competition – who are they, what are they doing & what can you learn from them?
7. Your Marketing Tools – how will you promote your company, product and services to your market? Will you use networking, telemarketing, direct mail, media (paper, radio, TV) advertising, Press Releases; E-Newsletters etc
8. Your Marketing Budget: important because it helps you monitor and control your investment. (As an aside many companies allocate far too little to their marketing budget or worse still don’t have appropriate measures in place to monitor results of various campaigns)
9. Your Sales Channels – will you use in-house sales force; distributors; an online business etc
10. Your Merchandising: are you creative and adventurous (market maker) or a dull and boring (market follower). [Research indicates that 77% of impulse sales can be traced directly to merchandising]
11. Your Pricing: are your prices appropriate. My experience tells me that many businesses are doing themselves no favours in this area.
12. Your Positioning: how is your business perceived by your target market, your staff (& importantly your sales team) and/or your competition? Cheap, expensive or great value for money. Are you happy with how you are perceived or is their work to be done in this area?

Phew? I can hear some of you say – that’s a lot of work.

Indeed, a good marketing plan is not thrown together overnight. In fact it should be a “living document” and one that is constantly being reviewed. Why? Well since your marketplace is constantly changing must your strategies and tactics then be constantly reviewed in light of these changes? In fact market makers often anticipate or create the demand in the marketplace for their goods and services.

[An excellent thought provoking book about "demand creation" among other things is, "Unlimited Wealth" by Paul Zane Pilzer.]

So if you need help in this area stick up your hand and ask. After all, you would be far better concentrating on what you are good at and maximizing the return on it – rather than trying to do it all yourself

Now for a laugh

(Thanks to Noel Whittaker for this gem!)

Dan was a single guy living at home with his father and working in the

family business. When he found out he was going to inherit a fortune when his sickly father died, he decided he needed a wife with which to share his fortune.

One evening at an investment meeting he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away. ‘I may look like just an ordinary man,’ he said to her, ‘but in just a few years, my father will die, and I’ll inherit $20 million.’

Impressed, the woman obtained his business card and three days later she became his stepmother.

Women are so much better at estate planning than men

Next time I will talk about an important part of business, namely available capital and it’s importance in business growth.