Monthly Archives: September 2012

Stay Focused

In this age of ever-changing technology, it is more easy than ever for a business owner to lose focus.  Yet it is even more important that you stay focused on your business to avoid being side-tracked.

The new insurance mandates from the federal government are a good example.  Most business owners know that changes are coming, but have little comprehension of what those changes mean to them.  There will be workshops and seminars and E-mails about the changes, including the implications once a more clear picture is developed.  Either way, this mandated change will require time away from your business and your customers.

So how do you stay focused? 

If there is someone on your team you can dedicate to learning the ropes about the insurance laws, get them on it now so they have time to gather the information and assimilate it.  Their challenge is to ascertain how it will impact your business and employees, if at all.

Another option is to rely on professionals you trust who are up on the changes, such as your CPA, legal counsel, tax preparer, financial planner, or insurance agent.

The 3rd option is to spend the time to understand it yourself.  Certainly the first two are better choices.

Another distraction facing business owners are employee issues.  It would be a perfect world if every employee showed up on time, knew what they were supposed to do, exceeded those expectations, and spoke highly of the company all the time.  If it were a perfect world.

So how do you stay focused?

It is improbable to think that employee issues won’t arise in your company, so the key is to be prepared for every eventuality.  Have a professional such as legal counsel prepare an employee handbook that stipulates employment conditions, expectations, and consequences.  Relegate that responsibility to your human resources department if you have one, and make sure they take time to keep you apprised of their actions.  You’re the one with ultimate legal responsibility – along with your Board of Directors and others with liability.

What is critically important when it comes to these types of issues as well is how clearly you convey the company’s mission to employees and share your vision with them.  The more closely they are aligned with your line of thinking, the more productive they are likely to be.

Your business plan and market strategies are also methods that enable you to remain focused on your objectives.

Cats, for example, are hunters.  When they have identified potential prey, they are focused on getting that prey over everything else.  They will stalk, crawl, sneak, pounce, or chase that object of desire until it’s caught.  They are focused.  When the prey is caught or becomes unattainable, the cats move on to other tasks.

Your business and marketing strategies identify your target consumers, what you will deliver to them, how and why.  Your company should be focused on accomplishing that objective.  If you lose sight or interest in that goal, it’s easy to move on to other tasks and later wonder why the business failed … or you went hungry in cat language.

Professional consultants are there to help you stay focused.



Why Are You In Business?

As business owners, one of the tasks we often overlook is to stop and think about why we’re in business.  Sure, we know we have to market, sell, produce, and deliver our product.  That’s a given.  Why we do what we do gets short shrift in the process.  That can have an impact on the entire operation of our enterprise.

Perhaps the most critical element in our business is the reason we are in business to begin with.  Some of us started our venture in the hopes our children would have an interest and want to take over some day.  Some got lucky and found a niche that hadn’t been filled yet and are now the cat’s meow in that industry.  Quite a few Baby Boomers want to enjoy their retirement doing something they’ve always wanted to do.  Why did you get into the business you’re in?

Here’s why the answer to that question is so important, and worth revisiting every six months or so:  The reason you are in business becomes your mission, and your mission is conveyed to your employees, customers, and the public as the vision and public persona (if you will) of your company.

That vision becomes the engine that drives your business.  As you will find in the Small Business Owner’s Guide to Marketing, your mission defines the products and services you offer and to whom you offer them.  It clarifies your position in the market and identifies strategies for marketing what you do to the consuming public.  And, as you look at it in terms of your life’s contributions, it also outlines an exit strategy for eventually getting out of the business to enjoy retirement.

You may think retirement would drive you crazy, but your spouse may want you to reconsider that option.  That’s another reason to think about why you’re in business today.

Take the time to think things through.

Will Your Great Idea Fly?

If you have a fabulous idea for a new business or an expanded product line for your existing venture, take some time to think things through before you invest a lot of time, money, and emotion in moving forward.  Why?  Research has shown that roughly one out of every 50 business ideas is commercially viable.

How can you find out if your idea will generate revenue, be accepted by the consumer, and be profitable?

The best method is a feasibility study.

Although there are many types of feasibility studies, and some you can be do by yourself, it is best to employ a professional consultant to assist you.  The person conducting your feasibility study should be an independent, third party consultant without a vested interest in your project or concept.  That enables them to retain impartiality and look at your idea from two main perspectives:  1)  Will the product or service be accepted by the consumer, and to what extent?; and, 2) Will the product or service be profitable and generate a positive return on your investment, and when?

Having someone doing the business and market research independently removes the emotional aspect of your project or idea.  You have come up with the concept, sketched out ideas, thought about names, and become emotionally attached to the idea.  This is good, but should be reserved for after you’ve determined whether the concept is commercially viable.

What does a feasibility study consist of?

1) A major aspect of your feasibility study is determining if there is a viable market for your product or service.  You need to know more than who is likely to purchase the product.  You need to understand where those consumers are in terms of their buying power, repeating purchases, personal preferences, and the media that will influence their buying decisions in a positive fashion, among other information.

2) A second major aspect of a feasibility study is the financial viability of your idea.  What will be the costs associated with producing the product or delivering the service, including manufacturing, staffing, packaging, selling, administration, and marketing, among others?  What will the market bear in terms of pricing?  At what point, if any, will the business break even and start generating profits.

The key to the financial perspective is being realistic in determining the projections.  Similar to thinking “everyone” needs your product or service is the thought that you can sell 20,000 widgets for $25 apiece when the industry has been successful selling them at $15 each.  You may stick with that projection, but will have to justify the $10 per unit difference to someone, including the consumer.

3) Other aspects of your feasibility study look at the overall economic conditions, how many jobs will be created or needed, the management structure of your venture and whether you have the experience required to manage the operation.

In short, a feasibility does cost you some money but in the long run it can save you money, time, and the heartache of failure.  It becomes a matter of knowing how much you are willing to invest to determine if your idea is commercially viable.

Consider this:  Would you rather spend $10,000 and two months to learn the idea isn’t commercially viable, or invest $200,000 and two years of sweat equity to discover the same outcome?

The role of the consultant in the process is to present every aspect of your idea in a fair, impartial and unbiased report so that you can make an intelligent decision.  Whether you elect to move forward with your concept or send it to the trash bin is solely your decision.

That decision is best made from a business perspective, leaving emotions aside.  Once you have made a decision to move forward, emotions must come back strong as you will need to invest your heart and soul in your exciting new venture.

Ask Brand Irons about their experience conducting feasibility studies.