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Monthly Archives: May 2017

Small Business Sins

1) Poor Business Planning
Most small businesses do not have even a summary business plan, and of those that do, many are cookie cutter business plans built with the help of a piece of software. At a minimum a business plan should have an executive summary; a company overview with company history and it’s current status; the companies strategic objective; a description of the companies products and services; a list of the companies intellectual properties including patents, copyrights, trademarks, processes and know-how; a market analysis; a competitive analysis, which includes competitors and their market position, and their strengths and weaknesses; a marketing plan, which includes your marketing strategy, product strategy, sales strategy, and pricing strategy; your customer service plan; sales projections by product, in units, for at least three years; and finally a set of financials which include projected income and balance sheets with a Performa sales forecast.

Here are some other important suggestions and facts related to business planning:

– Less than a third of small business startups have a business plan
– A business plan does not have to be incredibly detailed for operational purposes
– It should be a work in progress updated on a periodic basis
– Particular attention should be paid to the marketing plan
– A business plan is part of the first fifteen percent of the business development process which will assure the last eight-five percent will go smoothly
– The executive summary should be written last, after the rest of the plan is in view.

2) Lack of Strategic Objectives
A business strategy is made up of carefully crafted words making up templates, which in turn act as filters through which all planning, tactics and decisions are passed through before implementation. A strategic objective is therefore, a business strategy developed to guide an organization in meeting business objectives. A strategic objective is developed from the owner’s vision, passion, core competencies and values for the business. Contact Emerald Business Services or go to our website for a worksheet you can use to develop these critical business development tools.

3) Lack of Marketing Strategies and Tactics
Marketing strategies govern the development of tactics, which in turn provide the actions items contained within your planning process. The most important aspect of your marketing plan is the development of promotion strategies and tactics, which feed your promotion planning and provide you with sales forecasting data. The promotion plan should also detail costs and anticipated unit volume so you can set priorities and provide sales forecasting data.

4) Management in the Place of Leadership
So why is leadership so important in growing a business? Because leadership is about doing the right things, management is about doing things right . In many ways, it is leadership that will grow your business from a sales and a stability perspective, and management that will make, or keep it profitable. Also, consider that the best companies focus ninety percent of their attention on external issues, not internally , leadership is primarily a focus on the external issues.

5) Poor or non-existent Systems
Most people think of computer systems when they hear the word “system.” But in the since it is used here it means all systems, including the system you use for selecting the right employee, for decision making within a department and so on. One of the more telling statistics in this area is the fact that ninety-four percent of all task or project failures are system failures2. Some of the more common reasons for system failure include:

– Islands of automation verses integrated systems
– Absent or non-existent policies, procedures and user manuals
– Poor training.

6) Lack of Development of Leadership Style
Developing leadership ability has a lot to do with understanding the type of leadership required at different stages of your company’s development. There are at least six different leadership styles identified to be effective at different stages of a company’s development including; Visionary; Coaching; Affiliative; Democratic; Pacesetting; and Commanding . Understanding which leadership style to employ has been found to significantly increase the effectiveness, growth and heath of the companies in which leaders utilized multiple styles. Just as important is the understanding of what a leaders personal profile is. Armed with these vital bits of information a leader is equipped to pursue the right leadership style for the task at hand.

7) Care and Feeding of Sacred Cows
I do not have a statistic on the amount of money, time and energy expended on the sacred cows lurking in American businesses, but it has to be staggering. This list details some of the types of sacred cows you can look for in your business:

– The way we have always done it
– The product or service you keep pouring money into because you just know it will take off and be your future, (these are almost never accompanied by market research or even a promotional plan)
– Resistance to growth through change
– Idleness within the ranks, some experts believe ten percent of the poorest performing people should be let go each year to make room for people with fresh insights and ideas
– The company airplane, automobiles, and other perks, which drain company recourses
– The dead weight relatives and friends of the family who would be better off elsewhere, act as distractions, and add nothing to your bottom line
– The “expert” that no one can live with, who holds a noose around the companies neck in the form of some expertise or an unwritten code of loyalty.

You could call this business “101,” however, most of the issues developed in this paper are rarely taught in schools, much less heeded. These “seven deadly sins” can impede your company’s ability to successfully navigate through the turbulent waters of business development. If you do not understand all the issues summarized in this paper, do the research; find a business advisor to help you navigate these storms , you owe it to yourself, your business and the people who count on you.

Conquering the devil in the details is what management is about, concurring the “seven deadly sins of small business” is what leadership is all about. The beauty of developing top-level leadership skills is that there is no downside, only opportunity for growth in both your business and your personal development. Leadership is what the entrepreneurial spirit is all about.


Small Businesses Free Advice

SCORE – The Service Corp of Retired Executives (SCORE) has been established to help small business owners just like you. As a nonprofit entity recognized by the US Small Business Administration, SCORE consists of successful retired executives who have already been there and done that. Chapters are located all across the country and low cost seminars are helpful too. You can find one to one counseling with a former CEO, a VP of banking, a furniture store owners, etc. So many people volunteer to help ease the burden of business owners. Google a search for SCORE and you’ll find what you want.

Business Expos – Chambers of Commerce, business associations, and local governments will sometimes organize a business expo to attract business owners. Most people know that the U.S. was built on the backs of small businesses and it is these small businesses which help to propel our economy. The success of businesses such as yours is critical to helping new ventures get started, inventions to come to market, new ideas to be brought forward, and so much more.

Trade Associations – Depending on your field of expertise, your affiliated trade association can help you empower your business. Some associations work closely with small businesses to help them get established with their local, state, and federal government; write up a business plan; offer tax counseling; discuss the hiring and management of employees; and so much more. Whatever field that you are in, it could pay to join the association created to help you succeed at your business.

So, if you have a small business or are contemplating starting one, then any or all three of these choices can help you out. Your taxes and knowledge helps the economy and it is to the benefit of many that you succeed at what you do. Seek expert help, but do it through an established and proven entity that can deliver to you cost effective results.


How to Improve Craft Show Profit?

1.) Simple products – OK, a pet rock might be a little too simple (however, it might come back), but living room furniture goes a little bit beyond the standard craft show item. When you are thinking about simple crafts it doesn’t have to be simpleminded. Here is a good rule of thumb – it should be something that someone COULD make at home, but might be just out of the reach of most people who come to a craft show.

What this does is ensure a couple of things: first, it probably isn’t that complicated to make.

Second, it probably won’t cost you a fortune to produce because the components are relatively few, and inexpensive.

2.) Make them quickly – Let’s go back to the living room furniture example for a moment. How long would it take someone to do that? Let’s just say a nice rocking chair… a few weeks? You need to work for a year in order to make enough chairs to satisfy the demand!

The key to profitability is to make something that takes very little of your (or a helpers) time to make. This reduces any potential labor costs and it also ensures that you can produce enough of the craft to meet the need you will have at any of your craft shows.

3.) A great markup – Figuring out the price of a craft is going to be a tricky one. It might even differ between craft shows. When everything is accounted for, you should try to double or even triple the dollar value that it costs you to make the product. So, for example, if you produce something that costs $1 to make, you should be selling it for a minimum of $2 or $3 dollars.

This tip goes hand in hand with the others. If your craft is simple, and you can produce a quality product in very little time, chances are your cost for each item is going to be relatively low. The lower you reduce the cost to make a quality craft, the HIGHER your profit will be when you sell.

For anyone looking to profit from craft shows, this is a start. At first, it might look like it limits the choices you have for profits. That solely depends on you and the profit margin that you are expecting. It shouldn’t prevent you from making a craft that you enjoy, but it should give you a better understanding of what you might need to do in order to make your craft show business as profitable as possible.


Lesson Learned about Contractors in Business

The experience did introduce me to an interesting class of entrepreneurs collectively called, “contractors.” I don’t mean to generalize, but the contractors I’ve been dealing with are a stereotypically bunch who drive really big pickup trucks and wear worn work boots and dirty jeans and torn t-shirts and sport three-day whiskers and go by names like Buddy, Bubba, Junior, Earl, and of course Tiny, who was the largest guy on the crew.

Side note: naming a fat guy Tiny is like naming a three-legged dog Lucky or a one-armed man Lefty or a bald guy Harry. Sure, it’s funny at first, but then the joke, like the seat of Tiny’s pants and the fuzz on Harry’s head, wears thin.

So I gave my wife the OK for the pool and the contractors started coming out of the woodwork. There was the pool contractor, the concrete contractor, the landscaping contractor, the fencing contractor, the dirt removal contractor, the pest control contractor, the electrical contractor, and the plumbing contractor and contractors whose specialty I’ve forgotten.

Then the fun began as the contractors started to disrupt our lives. And the one question that kept going through my mind throughout the entire ordeal was this: how do these guys manage to stay in business since they apparently don’t give much thought to the usual rules of business, ignoring little things like scheduling, punctuality, employee management, licensing, quality of work, etc.

Now I mean no disrespect to the contracting industry as a whole. I’m sure there are many upstanding, honest, hard-working contractors in this world who take great pride in their work and do business by the book and give more than a cup full of tobacco spit about their customer’s satisfaction. Then there was the crew that took up residence in my backyard for the better part of the summer.

From them I learned a few valuable lessons about the contracting business that I’d like to share with you now. If you’ve ever dealt with a contractor of any kind I’m sure these lessons will ring familiar to you.

When a contractor says, “Yes, sir, we’ll be out first thing in the morning,” he really means, “Well, sir, if you’re lucky we’ll be out here at some point over the next 6 to 12 months and we won’t bother calling to let you know that we’re not coming or to reschedule. We’ll just show up and act like everything is alright and work a few hours before we disappear on you again.”

When a contractor says, “Yes, sir, that’s probably gonna be about a thousand dollars,” he really means, “Well, sir, I have no idea how much that’s gonna cost, but I can guarantee you it’s gonna be way more than you expect to pay. We’ll start at a thousand dollars and work our way up, how’s that?”

When a contractor says, “Yes, sir, we can get ‘er done in about a week,” that really means, “Well, sir, I can’t predict the future. The thing will be done when it’s done, period.”

When a contractor says, “Of course I guarantee my work,” he neglects to add, “If you can find me…”

Contractors are like renegade entrepreneurs, they want to be in business for themselves, but on their terms. If you and I approached our businesses with the same lackadaisical attitude we wouldn’t be in business very long.

Here are the lessons learned. When you offer a bid on a job, honor its terms. When you promise a price, don’t go over it. When you set an appointment with a customer, be there on time. When you commit to a schedule, stick to it. When you get the job, finish it. When something goes wrong, fix it. Now how hard is that?

So, now that I’ve ticked off every contractor within firing distance, let me say this: according to my deeply-tanned wife and shriveled up kids the end result was worth the hassle.

Even I have to admit, the pool turned out great. My wife is happy. The kids are happy. The contractors are happy. And I’m told that I should be happy because my family is happy and that’s what counts.