Monthly Archives: August 2014

Business Viability

Is your business concept feasible?

Will it make money at some point?

More often than not, we find business owners starting their endeavor without a clue as to its success potential. Success potential is a realistic consideration of whether the idea has a chance of earning a profit, and at what point in its existence.

Far too often, the person with an idea for a product or service has little experience operating a business. They’ve got what they believe is a great concept, and they become emotionally invested in moving forward. They probably invest some financial capital as well, but are unsure of how much more they may have to invest to make the project viable. They need to take the time to think things through.

Conducting a feasibility study involves taking a step back to evaluate the idea from several points of view, removing the emotional element (there’s a place to bring that back in), and assessing the business from a rational perspective. Among the considerations are financial projections – obviously – along with management, market demand, production, distribution, licensing and legal concerns, product definition, and a host of other business elements.

Financial projections need to be as realistic as possible. It’s easy to project an optimistic forecast for sales, but the pie-in-the-sky numbers can convey a false sense of short- and long-term profitability. The cost of goods sold (COGS), expenses, labor costs, and cash flow are among the down-to-earth considerations that can provide realistic numbers.

Realistic projections are also critical if the business owner needs financing. We’ve seen potential loans turned down because the borrower, when asked, told the banker the numbers were just “plug ins” and was unable to explain why they were in the projections.

An independent third party like Brand Irons can review the financial projections in a business plan and do the research to verify their accuracy. They can also look at the other elements, such as the strength of the management team, to provide a prospective lender with the information it needs to make a decision. Lenders often want to know if the management team is capable of making tough decisions when necessary, and the business owner completing a plan for financing is rarely objective on that issue.

One of the most difficult parts of conducting a feasibility study is removing the owner’s emotional attachment to the concept. Although it may be the best idea since the invention of the bread slicing machine, we advise business owners that they must be able to walk away from a project if all indications are that profitability is fleeting. Where emotion comes back into play is once the idea looks viable and the owner elects to move forward, their emotion becomes the foundation of the marketing strategy that convinces prospective customers to purchase.

Keep in mind that some people may have great ideas but lack the skills necessary to carry them through. Yes, a feasibility study can cost thousands of dollars and months to complete, depending on the concept and its variables.

It is well worth the investment if, in the long run, it saves the heartache of risking one’s personal wealth to realize they’ve lost it all. And, if it proves feasible, the study becomes the foundation of the business plan and marketing strategy. More next time.

Brand Your Work – Work Your Brand

If Management Is The Problem

Your business seems to be doing well, but customer service continues to fall short of expectations. You’ve brought in specialists to provide consumer-oriented training for your front-line employees. That shows slight improvement before slipping back to before training levels. You’ve analyzed products and systems and virtually everything else you can think of to evaluate, but nothing changes.

What if management is the problem?

The answer lies in being able to step back and view your operation from an outside, third party perspective. The hard part of doing this is removing any emotional attachment you may have to the members of your team. You need to analyze your management staff from the viewpoint of a potential buyer for your business, and be critical.

Whom would you keep? Which management staff would you let go if you knew everything a prospective buyer sees?

Management can get complacent. Team members may believe they have so much tenure that they’re beyond getting fired. They may be family or think of themselves as your friend, and bosses don’t fire friends, do they?

Management, like most employees, tend to resist change. Remember the adage: The only thing that’s permanent is change. The economy, consumer buying trends, market conditions, product features, disposable income levels, and virtually everything else in life changes. Evaluate how your management team has changed with the times. Has it?

Let’s look at an example pertaining to customer service. Assume your heating and cooling company employees are required to wear uniforms with the company logo, shirts tucked in, and a name badge to identify themselves to a customer. They are also supposed to put on shoe covers before they enter a consumer’s home. That’s the protocol.

Now assume a supervisor tags along on a home repair visit and tells the technician to skip the shoe covers because “we need to get in, get the job done, and get out quickly.” On subsequent calls, the technician foregoes the shoe covers on the assumption management thinks it’s okay. It’s acceptable behavior now. Then a customer complains about their soiled carpet.

Is it the technician’s fault? Or the supervisor’s? Or is it the company’s?

If you have all the facts, you begin to look at other short cuts the supervisor is taking. You wonder if his reports are accurate. Is he padding his expense report?

The protocol in this example was in place for a reason: Keeping customers happy. Deviating from it is unacceptable from a manager if the company expects front line employees to adhere to it.

The level of responsibility starts at the top. You, if you are the business owner, have the ultimate responsibility for every decision that’s made in your company. Yes, you need to delegate as much as you can to people you can trust, but the weight always comes down on your shoulders.

Always be willing, and able, to step back and take a hard look at your business. Do you have the right people in place? Can they be trusted to follow through and make the right decisions?

If you have a hard time separating yourself from your operations, that’s an excellent reason to bring in a professional business consulting firm such as Brand Irons. Consultants can often address issues by talking things over in a phone conversation. The key is to be open and honest with your consultant, lest they give you bad advice.

Brand Your Work – Work Your Brand

Handling Customer Complaints

We often find that training to help employees deal with customer complaints falls short of expectations. The result is dissatisfied customers, discouraged staff members, loss of brand loyalty … and profitability.

We’ve expanded on these eight steps from Associated Bank as a tool to improve your business, your customer service, and strengthen customer loyalty:

Train for the worst. When your employees, associates, customer service associates or whatever you call them are prepared for the worst possible scenario, such as the potential for an active shooter, they are ready to handle those situations. It makes handling the more simple problems much easier.
Listen. Customers are emotional when they complain. They want to be heard and give you information that is, indeed, helpful for operating your business. Provide your employees with the training they need to be able to listen and, most important, understand what is being said.
Assume the truth. You may get an occasional customer who tries to milk the system, but most are honest and should be assumed to be telling the truth. By assuming it’s true, your employees can focus on fixing the problem, which should be the desired outcome.
Apologize. An apology is more sincere than saying “I’m sorry” for something that may or may not be the employee’s fault. The apology is for the fact the customer had to experience the problem. It should be sincere – and count – so it can diffuse a potentially tense situation with an irate customer. Tread carefully for legalities so the apology doesn’t end up in court as a “Well, he said …”
Act Immediately. Staff should be trained to take care of the problem right away, and to keep the customer apprised of what’s been done. We asked someone registering us for an event to correct a misspelled name and it was done immediately. That instills confidence that the company does care about its customers.
Ask what they want. Be straight forward and ask what can resolve the problem to their satisfaction. They may not actually want anything other than to apprise you of a problem or potential issue. Use this as an opportunity to find a solution – for the client and for the prevention of future problems.
Make it easy to complain. Provide a phone number on invoices or your website. Give out an E-mail address for customers to express their concerns. A word of caution, however: Avoid letting those concerns reside and linger in a voice mail message system or in box for days on end. Take care of the complaints promptly.
Follow-up. If nothing else is accomplished, follow-up. Make sure your customers are pleased with your service, your products and/or services, and your company/brand.

Brand Irons can provide your company with an in-service workshop on customer service. You can find out more with a phone call to (920) 366-6334.

In our next blog, we’ll cover whether management may be the problem.

Brand Your Work – Work Your Brand

F-2-F Marketing

What seems to be a dying art – being face-to-face with someone – is still relevant for marketing your business. For those of us who enjoy interaction with other people, the trend toward faces down with eyes glued to the small screen is annoying.

Sure, texting and the other tasks you can accomplish on your smart phone seem to increase efficiency and enable us to do more, but does the fascination with being connected all the time detract from reality? How often do you see people in restaurants on their mobile devices when there’s a live, breathing person seated across from them?

Who is more important than the person you’re with at the moment?

There, we’ve exposed the secret to face-to-face (F-2-F) marketing: Be in the moment with the person you’re with!

If that person is someone you’ve never met before, you should get to know them for a number of reasons:

Are they a potential customer?
Do they have valuable connections?
Are they someone you can trust with your business?
Could they refer people to you?
Are they a reliable resource?

If the person you’re face-to-face with is someone you already know, how well do you know them? Do you know what they like to read? Where they live? How they earn a living? What they enjoy doing in their leisure time? Why they do what they do?

We can learn so much by being open to F-2-F discussions with other people. It may be awkward at first, but you begin by approaching someone and introducing yourself. Remember: They may be as bashful as you are when they’re approached.

Ask them their name, and try to remember it. A technique that we’ve found to work well is to repeat their name several times in the first few minutes of your conversation.

Ask where they work and what they do. Be genuinely interested in their answers. Pay attention and avoid distractions, such as looking for someone you’ve been dying to meet. That’s rude.

Ask why they do what they do, how long they’ve been doing it, and maybe even how they got into doing what they do. You may discover a rather fascinating story that leads you into a deeper relationship and potential friendship. You may share a favorite cuisine or vacation destination.

We struck up a conversation with a couple on a flight and showed interest in them going to help their son open a new restaurant on the east coast. Before the flight was over, they had pulled out the business plan and financial statements for us to look at!

The point of a F-2-F meeting may be to get acquainted, conduct business, close a sale, or to share camaraderie. Avoid being in a rush as much as you can. Take the time to enjoy the conversation. Assume you will learn something new. Crave knowledge.

If you’re face-to-face with a customer or prospect, concentrate on the individual and what his/her needs seem to be. If you’re unclear, ask clarifying questions. Get down to what they want and you’ll enjoy far greater success with higher closing ratios.

In our next blog we’ll cover the topic of Handling Customer Complaints. Stay tuned.

Practice the 3-foot rule: If someone is within three feet of you, they should know what you do. If they’re beyond three feet, get closer.

Brand Your Work – Work Your Brand