SBM #67 – Demand More

SBM #67-Demand More from your service providersI have worked with hundreds of entrepreneurs helping them to shape their businesses into their vision. One problem that I frequently come across is the quality or I should say, the lack thereof of some 3rd party service providers e.g. bookkeeping, IT specialists, etc.

For the record, I’m all about outsourcing non-core or mission critical activities to individuals who specialize in a given area. But time and again I find that many of these providers never consider the best interests of their clients.

Most of my entrepreneurial ventures have been as a service provider and one of my key mandates was to always be searching for ways to reduce our costs to our clients. That may sound treasonous, but in fact it helped to grow our profits and our roster of clients, most of whom were divisions of global packaged goods companies.

“Clients are always looking for cost reductions…suppliers are always looking to increase their billings”

The premise was simple. Clients are always looking for cost reductions on the goods and services they buy, so my thought was to pre-empt that thinking. Without boring you with the details, we provided telemarketing and communication services to the packaged goods industry, servicing their small or orphaned accounts.

Our normal program recommendation was to execute 3-4 telemarketing sales programs a year. The targeted accounts would range between 3,000-5,000 retailers. By the end of the second program we had accumulated sufficient information to go back to the client looking to adjust our original agreement-downwards!

Of course, this is not the norm. Most suppliers always look for ways to increase their billings by recommending the program be expanded. Our approach on the other hand, was very disarming to clients but was based on solid business premises.

Our typical recommendation after the second wave, was to reduce the number of calls by around 20%. Because at this point we usually had enough data to determine which accounts simply weren’t interested, for whatever reason, in dealing with us. We were in effect, wasting our clients money and therefore they should be culled from the program.

  1. So, what did this approach do for us? It positioned us as a trusted partner and an organization that had our clients best interest at heart.
  2. It dramatically increased our sales ratio performance e.g. a 35% sales ratio automatically jumped to over 40%.
  3. Our revenue per call would also soar. Clients always like that.
  4. Our profit margin jumped significantly as we kept a percentage of the savings. The clients never questioned us as we passed on about 80% of the savings.
  5. More often than not, clients would reallocate the savings to another program for us to execute. So, we really didn’t lose anything.
  6. Our efficiency increased as we were able to service more clients, at higher margins, without increasing our manpower or physical space. All while growing our revenues.
  7. Our clients regularly referred us to other divisions within their organizations.

The best part of this strategy was that we rarely had to justify our fees. Not many service organizations have that luxury.

“When I uncover these duplication, clients begin to lose faith”

Unfortunately, in working with my clients today, I find that many of the service providers they use, never look to help them. They simply focus on maintaining the status quo to protect their billings that often results in the duplication of efforts. When I uncover these duplications and bring this to my clients attention, they quickly begin to lose faith in these individuals.

These service providers think that by helping the client be more efficient or show them a better way, that they will put themselves out of job. Nothing could be farther from truth. It would in fact solidify their position in the eyes of their clients.

To be fair, clients are not innocent in this by any means. I’ve talked about this in The Small Business Minute #56 Delegate not Abdicate. Too many entrepreneurs eagerly outsource tasks that they don’t like doing or have no knowledge and then immediately ignore it assuming they no longer have to worry about that area of the business.

There are many great individual service providers that are engaged in their clients’ business. They do provide valuable assistance and insight but there are just as many that don’t.

If your service providers are not helping you run your business and don’t regularly suggest improvements, it’s probably time for you to demand more.

I’m Greg Weatherdon and this has been your Small Business Minute.

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SBM #66 – Change Someday to Today

Someday I’ll be able to slow down. Someday I’ll be able to take more than just a couple of days off. Someday, someday, someday. This refrain is repeated daily by millions of overworked and underpaid entrepreneurs. Some feel trapped in a design of their own making.

Others feel they have traded their soul or some other part of their being for the sake of their company. Still others are oblivious to what’s happening and just accept, whether it’s right or wrong, that this is what they signed up for.

They kid themselves every day into believing that someday is just around the corner, when in fact, it’s nothing more than just a shimmering mirage far off in the distance.

Entrepreneurial lifestyle

Self employment is an insidious
lover that knows no boundaries

When we take the entrepreneurial plunge, we readily accept certain realities, like long hours and reduced or no income. But if the truth be told, the list is much longer and it’s not until we are knee deep in it, do we realize how little we know about this thing called, the entrepreneurial lifestyle.

Self employment is an insidious lover that knows no boundaries. Left unchecked, it will consume your every waking moment with thoughts of opportunities, challenges, self doubt or euphoria and of course the promise of someday having a better future.

Throughout this journey, many never realize that as time creeps by, they have given up activities, interests and even friendships. They justify it by saying they don’t have time and the business requires all they’ve got, and someday they’ll reengage.

Entrepreneurship is a lifestyle unlike others and those that are successful have realized that they must either manage this lifestyle or risk being managed by this lifestyle. Entrepreneurship can provide an individual with tremendous freedom or enslave you to a life of servitude. The choice is yours and to blame the demands of the business on limiting the free time you have, is doing yourself and the business a disservice.

Why did you go into business in the first place? Like everyone else, you had a list of goals you hoped to achieve when you set out on your own, but again like most, we can longer find that list and we end up in someday mode.

Someday mode

If you’re one of the millions of entrepreneurs who find themselves in this someday mode, it’s time to do something about it. This is not to be taken as an intervention, but more of an attitude adjustment. Take a moment and think about what you’ve given up to date. It may be that you’re saying no a little more frequently to taking your children to their soccer practice. Maybe your turning down every invite to golf or some other activity you used to participate in, because your busy. When’s the last time you went for a bike ride or yoga or to the gym

What if you just said yes once in while? The work will always be there, but your friends and family may not. And what about your soul? You know you could use the distraction, so what’s stopping you, other than yourself?

Work life balance

Work life balance is tough to achieve on a daily basis, but not difficult occasionally. What about today? If you’re self employed, call your boss and tell them you’re taking the afternoon off, I’m sure they’ll understand and change someday to today!

I’m Greg Weatherdon and this has been your Small Business Minute.

Got a business challenge? Let me know and I may post a solution for you and your privacy will be assured.

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SBM #65- Decision Making-Engage Your Employees

Decision Making- Engage Your Employees

Why is it that so many owners think they and they alone have all the answers, to every problem in their business?

When you consider that most owners started their companies as the only employee, it’s easy to understand how this attitude got started but why it continues is the question? Granted, there will always be those technical, legal or safety issues that require the owners input, but what about those day-to-day operational, sales and marketing challenges that arise?

Businesses are not democracies

Contrary to all the discussions about managing in the new millennium, businesses are not democracies and the final decision still rests with the owner. However, there are plenty of opportunities to engage employees in the problem solving process.

Owners who think that the only opinion that counts is theirs, are doing their employees a great injustice. What they fail to realize is that they are hurting themselves even more by being the choke point for every decision within their company. The risk of operational paralysis increases exponentially.

It’s interesting to note that this frustration of having to make every decision, usually manifests itself in longer tenured entrepreneurs. It is my opinion, that the compounding effect of always being called upon to make every decision, has just depleted their patience. Their younger self, would have relished in the control and prided themselves in being the go to person for everything. That’s one of the reasons they went into business in the first place, to be in control of their destiny. It got their blood pumping.

But as a company grows and time goes by, there are many more decisions to be made. Finding the time to deal with everything then becomes a herculean task and develops into a source of anxiety and stress. The thing is, it’s a situation of their own doing and can be easily rectified, given enough time.

“Isn’t that one of the reasons

we went into business?”

Like everything in business, adopting a new approach and moving away from old habits can be daunting. But learning to engage your employees in the decision making process can bring with it tremendous freedom, and isn’t that another reason we went into business?

But before we go any farther, we must first understand that there are limits to engaging employees. If you’ve never asked for their input before, you need to contain it to their areas of responsibility and not strategic issues facing the company. My rationale is quite simple. First, by keeping them focused within their operational area, they suddenly don’t become distracted into what could be someone else’s area of responsibility. Let’s face it, everyone has opinions about other areas of the company. Keeping their input to their operational area, forces them to look inward at a deeper level.

Secondly, when you stop and think about it. Who better to help than the people doing the job in the first place? There are countless stories of large corporations ignoring input from the front line employees only to have near death experiences. What they finally realized is that they could have avoided the problem in the first place, had they just asked these same people. The same hold true for many small enterprises.

So, if you find yourself in the situation of having to make every decision and want to affect change, it needs to start with you. As challenging as this may be, you must first transform your approach and embrace the change. So, the next time one of your employees brings you a problem, instead of blurting out the solution try asking these simple primer questions:

1. What do you think we should do?
2. Why do you think that?
3. If we do that, what are the downsides?
4. Do you have another solution?
5. What are the downsides to this solution?
6. Which solution do you prefer?

Don’t give them answers

Because of your experience, there may be additional solutions that they haven’t thought about. This now becomes another teaching moment. Through this teaching opportunity, try to help them uncover those additional solutions by asking even more simple thought provoking questions. If they are unable to uncover additional solutions, don’t just give them the answer, but make sure you explain why. By explaining, you broaden their perspective and help them to understand your thinking about the business.

To make this an effective exercise, they need to know that you’ve got their back and that any of the solution you both agree to initiate could fail and that it’ll never be held against them.

This is one of those evolutionary processes that can take time to fully realize its potential. Consider it an investment that will have tremendous payoff in the future.

Taking the time to engage your employees in the decision making process, may just turn you from being a cynical employer, who can’t get employees to make decisions, to one whereby your staff is fully engaged.

When this all comes together, it’ll free you to focus on those higher value activities that should be your priority. But remember, it all starts with you!

I’m Greg Weatherdon and this has been your Small Business Minute.

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