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Start a Business That's Destined for Success

What It Takes to Start a Business That Succeeds.

 
To start a business you have three choices. You can inherit/buy an existing business, purchase a franchise, or start your own business. I have presented to, and worked with, thousands of entrepreneurs, start-ups and small business owners over the years and I have developed a list of best practices to follow. These best practices to plan, launch and grow a business will help you to maximize the likelihood that you will be able to start a successful business. Need some historical perspective for inspiration? Check out this cool article:
What is Entrepreneurship,” from…of all places, the U.S. GOVERNMENT!
 
*Combine Your Passions With Your Strengths: One way for you to ensure business start-up success is to find the things that you love to do and are most passionate about, that are also the things that you are most adept at/experienced in. You really can’t have one or the other you need to have BOTH, as starting a new business is such an all-encompassing venture. You have to do what you love AND be really, REALLY good at it! Set out to change the world. Dare to create something great.

 
Are you ready to be the next great entrepreneur? Check out this cool video from the Kauffman Foundation, on why you just might be.
 
Develop a Killer Business Plan:
Your business plan will be used by you to chart a course for your progress in starting a business. It is your road map to plan your business. It has to be comprehensive and compelling, so you can share it with investors, Venture Capitalists, partners, suppliers, and vendors. Sections of a well developed business plan include:
Executive Summary (1-2 pages): Why did you choose this specific business, and why are you uniquely qualified to achieve success planning/launching this business.
 
*Business Description: What are the fundamentals of your business, namely the legal structure (more about legal structure options later on), the products sold and/or services provided, and your short and long-term goals.
 
*Operations: The operations section will address all of the logistical considerations it takes to plan and launch your business including how your source (procure) materials to make your products or deliver your services, the systems, processes, machinery, software it will take to run your day to day operations. You will also need to include details about your store location, IF you have a physical store presence (brick & mortar.)
 
*Marketing & Sales: You will need to develop a marketing plan including all of your online and offline marketing campaigns by month with associated costs for your first year of business operation. Be sure to cover the traditional 5P marketing mix of pricing, products, placement, packaging, and promotions with the 2Is (interactivity – how and how often you will interaction with your customers, and individualization (how much you will customize your communications to your specific customers. Check out free marketing research at the Marketing Research Roundtable.
 
Your marketing includes such tools as:
* Your blog and website, podcasts, videos
* Email marketing
* Direct mail
* Marketing collateral (flyers, brochures, presentations)
* Company branded merchandise
* Trade shows, events, annual conferences, bazaars, street fairs
* Networking events
* Advertising (Print, broadcast, online, out-of-home/outdoor)
* Broadcast advertising (TV, radio)
* Telemarketing
* Public relations
* Catalogs, circulars, directory listings, Yellow Pages
* Search engine marketing/search engine optimization
 
Your marketing campaigns must be targeted to your ideal customer (target segment) so you MUST create a comprehensive profile of your absolute ideal BEST customer. Your top 20% best customers generate 80% of your sales, buy 80% of your stuff (the Pareto Principle.) Develop employee welcome kits, appreciation/loyalty programs, refer-a-friend programs, and retention programs.
 
*Human Resources: Your management structure, organizational chart, key employee hires, your talent management/acquisition efforts including recruiting, hiring, on-boarding, talent retention through employee recognition programs, coaching/mentoring, professional development, promotions, job-sharing, standards for teamwork, job rotations cross-training, etc.you will need to have a basic understanding of labor practices and all applicable state and federal guidelines/laws pertaining to employees like OSHA, FMLA, ADA, etc. Develop a new hire orientation kit complete with employee manual, welcome letter from YOU, the President, the company vision, mission, and standards, plus policies, procedures and benefits.
 
*Financials: Include your personal income statement, statement of cash flows, balance sheet, and income statement.
 
*Financial Request Letter: How much money will you need? How will the money be used? How and when will the money be repaid?
Don’t be so fixated on your plan that you refuse to alter course or deviate from it. You want to be flexible enough to change course in order to take advantage of unique opportunities that present themselves to you.
 
*Create a World-Class Culture: Become a business that others will love to work for, partner with, buy from, all from DAY ONE. Create a vision and mission statement, write your declaration of values that your business will subscribe to. Perhaps there are causes that you want your organization to support. Call it social corporate responsibility if you must, but the deeper question to ask yourself even as you think through what your business will stand for is:
 
“WHEN ALL IS SAID AND DONE, WHAT DO I WANT TO LEAVE BEHIND?” Be specific yet bold. After all, you are writing your legacy! For motivation check out what Sir Richard Branson has to say in an interview he gave promoting his book: “Screw Business As Usual.”
 
“Social entrepreneurship is the work of social entrepreneurs. A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change (a social venture).” – Wikipedia.
 
How to write a GREAT vision statement.
 
How to write an AMAZING mission statement.
 
*Research…Research…Research: Conduct significant research into your industry/industries including competitive analysis of your direct competitors. Search relevant databases such as D&B, Hoovers, Census, your local library (Science & Information business Library/SIBL in NYC) know the applicable SIC (standard industrial classification) and NAICS (North American Industry Classification) codes that pertain to your specific industry. Here’s a really cool list of resources to gather industry research and conduct competitive analyses:
 
* IBIS World for industry-specific research
* Key business statistics
* Weddle’s Directory of Associations
* Occupational Outlook Handbook
* Industrial Reports: www.census.gov/manufacturing/cir/index.html
* E-commerce research
* Mintel Reports for industry-specific research
* NY Public Library Small Business Resource Center
* U.S. Census FactFinder (NY Demographic/geographic data)
* NYC Community District Profiles: www.nyc.gov/html/dcp/html/lucds/cdstart.shtml
* New Jersey State Library
* Moody’s
Hoover’s
* Gale Encyclopedia of Associations, Directory of Publications & Broadcast Media, Encyclopedia of Business Information Sources, Encyclopedia of Management and Small Business Management, consultant’s and consulting Organizations directory.
* Securities & Exchange Commission E.D.G.A.R database for quarterly & annual reports from publicly-traded companies
 
* Choose the Right Legal Structure: You have five (5) choices to select from for your legal structure:
* Sole proprietorship
* Partnership
* Limited Liability Corp. (LLC)
* C Corp.
* S Corp.
 
*Solicit Feedback How to Start a Business From the Experts: Talk to as many people as you can who resemble your target segment. Remember your ideal customer profile. Ask them as many questions as you can about their feelings towards your proposed product/service ideas, have they bought these products before, who have the bought them from, where did they buy them, how much would they be willing to pay for them, etc. Asking people most closely aligned to what you have to offer is called gathering primary research and it is absolutely critical to gaining a better understanding of your ideal customer and the potential demand for your offerings.
 
*Register Your Business: File your business with the state to obtain a doing business as certificate with a federal tax identification number. Register your business with Dun & Bradstreet (www.dnb.com) to obtain a 9-digit numeric D-U-N-S # (D&B Universal Numberings Service) number. It’s FREE (we business start-ups love free stuff) and gives you an extra level of professionalism.
 
*Talk to Potential Investors Early On: Talk to angel investors and venture capitalists to ask them what they think of your business idea. It’s an informal “pitch” to gauge the aggregate level of interest in/receptiveness towards your new business by people that assess new business ideas all the time. Ask them to be brutally honest (which they will) to solicit possible objections. Objections are food from the Gods as you can go back and address those through your planning so they are rectified before you ever have a need to actually pitch investors for start-up business funding.
 
*Take Classes. Lots of Classes: Register to take all of the courses you ca on entrepreneurship from accredited/respected organizations such as: WIBO, NYC Business Solutions Center, FastTrak at the SUNY Levin Institute, the continuing & Professional Studies program at your local college/University, business incubators, economic development centers, etc.
 
*Get Ready to Work Harder Than You Ever Have Before: No matter how hard you work by nature or regardless of how demanding your past jobs were, you will never work harder than when you begin the process of planning and starting a business. You will become an expert at time management, working off lists of To-Dos, delegating, prioritizing, and seeking help from others. Consider the option of hiring an administrative support services firm to take on all the administrative functions of your business to free up your invaluable time to focus on the key tasks of planning your business.
 
*Find Coaches & Mentors: Look for people in your personal and professional networks that you know and trust but who have experience in starting businesses themselves. Consider hiring a business coach (me) to help you. We all have “blind spots” – those areas where we lack experience in. A coach should come to you personally recommended, know you well, and serve many roles in working for you including BUT NOT LIMITED TO: Strategist, Mentor, Adviser, Supporter/Motivator, Task Master, Therapist, and Life Coach.
 
*Talk to Business Owners and Entrepreneurs: Ask as many people as you know who have started their own business what lessons learned they can share, what were the things they regretted doing, what do they wish they did differently, what things they are glad they did. What would they have done differently if they could go back in time. Don’t be afraid to pick their GREY MATTER. Learn from those that have already gone through the process.
 
*Surround Yourself With VERY Nurturing People: Starting a business is so stressful you need as much positive support as you can obtain. Lean on those people that have always been a positive force in your life for moral support. At the same time, it will pay you dividends if you distance yourself from those people (both friends and family) that are by nature negative people. At least until you get through the heavy lifting of doing your new business planning.
 
*Acquire Expertise in Social Media, Sales & Public Speaking: These are absolutely CRITICAL for business owner start-up success. Start the process of informally “interviewing” potential vendors, suppliers, distributors so you will have sourcing options to obtain the materials you need to make your products/sell your services, and have contacts in place to distribute/sell your products.
 
*Build Your Brand By Becoming a Subject Matter Expert: You must become known as a subject matter in your field/the industries you plan on competing in. Join all relevant industry trade associations, begin following the most influential industry bloggers, understand all of the industry’s most critical trends and developments.
 
*Get Published: In today’s world where the masses generate content, you’ll need to “join the party.” Start writing on the topics that matter most to your industry. Submit articles, white papers, case studies, research papers to the relevant editorial contacts in the media that follow/report on the industries you will be competing in.
 
For additional guidance on how to structure your business plan check out My Own business: “How to write a business plan or free business planning resources.”
 
Here’s to your business start-up success in the fourth quarter of 2012…and beyond!!
 

Ethan
The Compassionate Biz Coach

To Find Work DON'T Conduct a Job Search

If you want to find a job in today’s workplace you need an entirely new job search approach.

 
The trick to finding a job in today’s job market is as counter-intuitive as you can imagine.
 
Don’t look for a job. Instead, you should be creating your very own personal career job search plan of attack.
 
Are you or someone you love looking to find a new job, want to change jobs or careers or re-enter the workforce?
 
If you are and you are looking for a job based on the old passive job search strategies of looking for what’s being advertised, then you are likely having trouble.
 
The answer to the question “why?” reflects many, MANY deep fundamentally alarming trends associated with today’s job market and the lack of prospects out there that match each of our ideal dream jobs.
 
First off, even in the best of economies and job markets (which we’re no where close to these days) no more than 10-15% of all available jobs are ever advertised. Positions are being filled by people who know family and/or friends they can hire by looking through their own personal and professional rolodex of contacts to fill those job vacancies. Whether you call it nepotism and cronyism, the cold hard truth is most available jobs go to people who know people that are in a position to hire.
 
The old ways of job searching are dead. Plain and simply…and they are never coming back.
 
There are no set in stone guidelines anymore on how to conduct an EFFECTIVE job search, other than you have to be persistent, willing to embrace constant change, embrace taking calculated risks, explore all your options, and most urgently of all…
 
…do NOT equate who you are with the job title of the position(s) you’ve held in the past! most of the job seekers I coach continue to define who they are professionally by the title of their last job. That is so 20th century!
 
In order to achieve success in today’s global contract workplace, you CANNOT conduct a job search strategy with passive approaches like applying to jobs online or going through gatekeepers, i.e. recruiters, staffing agencies, or Human Resources departments. These strategies don’t work. These gatekeepers don’t care anything about you, your wants, needs or career aspirations.
 
In today’s “NEW NORMAL” the average American goes through 8-10 job changes BEFORE THEY REACH 35. People between positions may look for up to TWO YEARS, just to find a contract assignment that lasts a year or less.
 
Meanwhile, companies are sitting on huge piles of cash but are unwilling to hire full-time workers because of their uncertainty surrounding their future business prospects due to the constantly changing industry landscape they face through shifting Federal and state business regulations, global competition, technological advancements, and changes in the workforce.
 
Rather than searching for a job by defining yourself VERY narrowly within the confining straight jacket of a job title, you MUST learn how to sell yourself (you are a “PRODUCT” as cold as that sounds) bundled into your collective work experience, education, skills, volunteer work, community engagement, hobbies, interests, certifications, professional training, language proficiency, experience studying/traveling abroad.
 
In today’s job market you must convey that you are a set of “solutions” to the specific challenges facing specific industries and the organizations in those industries that you WANT to work at.
 
I teach a search methodology based on actively engaging no more (or less) than 18-32 organizations you want to work at AT ANY ONE TIME. Here’s why.
 
Research shows that 18-32 firms is the maximum number of organizations that a job seeker can effectively target at any given time during their job search.
 
But how do you pick your 18-32 firms to go after? Start by identifying a short list of 3-4 industries that you are interested in working in.
 
Next, find 6-8 organizations in each of these industries whose culture matches your values, beliefs, and possess the type of culture that are attractive to you and you want to work at.
 
Then, determine what you want to do within those organizations. I am NOT talking about you selecting a job title. Rather, define the role that you will create for yourself there that encompasses all of your core competencies that would unleash your full potential and enable you to be fully engaged there.
 
Then after you define a golden opportunity for you in these organizations, find the senior most person in the Department/division of that place that you would be reporting to in the desired role.
 
Next up…research, research, research!
 
Find out as much as you can about that individual’s background and experience. Research the organization, their key products and services, the management team, their key clients, recent competitor acquisitions, mergers, their intellectual property portfolio (patents, trademarks, copyrights) recent contracts they were awarded, their partners, vendors, suppliers, etc.
 
Sounds like a LOT of work, no? Why bother taking this approach?
 
Because few of the THOUSANDS of your potential competitors are doing this. They are still applying to jobs online and reaching out to Human Resources Departments or chasing down recruiters who never respond to them, don’t give them the complete picture, mislead them, and do not care if these job seekers find employment or not.Doing all of this research requires you to take a strategic approach to your job search networking, so you can build a social and professional network of leads that you keep track of on a job search tracking sheet.
 
Find the people in those 3-4 industries who you would be reporting to in a job that doesn’t exist that you would be IDEALLY suited to achieve success in, then you need to attend every trade association meeting, event, conference, panel, networking event that THESE PEOPLE GO TO.
 
At the same time you are doing your research, you will also need to expand your professional brand online using social media and become a subject matter expert in the fields you want to break into.You should be writing articles, case studies, white papers on all appropriate fields related to your industries of interest.
 
Once you know as much about these organizations and individuals as you can, you will need to determine (and tell them) how you WILL (not can!) provide a set of solutions to the business challenges they face. Specifically, you need to be able to show them how you are going to help them in THREE very specific ways:
 
1. Make them money;
2. Save them money; or
3. Improve their operations…to make them money/save them money.
 
It does not matter if you are in sales role or not, you have GOT to be able to show them tangibly and with examples from your past how you will achieve one or more of the above.
 
Write a call script targeted to address how you can provide a set of solutions to their top challenges, then pick up the phone and call the person you identified that you would be reporting to and sell yourself.
 
Your goal for every call is to schedule a face-to-face to have a deeper dive conversation with them.
 
The Holiday season is fast approaching. Many of your competitor job seekers will slow down or take the last six weeks of the year off.
 
Not you! The people you have identified that you want to target will have a lot of down time these next 2 months and will be much more willing (and able)
to meet with you over a cup of coffee to hear how you propose helping them and their organizations overcome their challenges.
 
Good luck! Remember to be successful you have to be contrarian, do what others AREN’T doing, be persistent, take risks, pursue the paths least traveled and create your own destiny!
 
Here’s to a great end of year. You can and WILL find your dream job IF…you take this unconventional approach.

How to start a business successfully in 2013

How to start a business successfully in these turbulent times

It’s one percent inspiration, 99% perspiration, so “GET GOING!

 
There’s been a lot of talk in the recent presidential debates about which party has done the most to help small business owners to start a business and support business start-ups. The truth is, our government has done pathetically little to create an environment that fosters a high rate of new business start-ups.
 
To help you in your planning to start a business, I have summarized my suggestions (consider it a list of best practices, really) experiences helping entrepreneurs, start-ups and small business owners plan, launch and grow successful businesses in today’s transformational, global contract business climate.
 
Begin with the product of YOU. What are the things that you are most passionate about AND enjoy the most. Find where those two intersect and those are the things you should focus on trying to start a business around.
 
What makes you uniquely qualified to plan, launch and grow this business? You must be able to define your unique selling proposition. Your U.S.P will answer the question: “Why am I ideally suited to start a business and make this business a success?” If you cannot answer this question honestly/objectively, then you will merely create a “Me-too” business that is like others in the industry.
 
Therefore, you will only be able to compete on price and WON’T be able to build a loyal following of raving fans.
 
By answering these questions, you are in effect writing your 1-2 page executive summary of your business plan.
 
Speaking of business plans…you’ll need to write one. Here are the sections that a well-defined business plan must include:
 
* Market research
* Executive summary/business description
* Marketing and Sales sections
* Operations & business location(s)
* Human Resources
* Legal/compliance: permits, licenses, taxes and incentives
* Financials: Balance sheet, Cash flow statement, Income statement
* Financial request: obtaining financing
* Financial projections
 
Research EVERY conceivable aspect of your potential industry, from key competitors to suppliers, potential vendors, influential bloggers, industry trade shows, conferences and events.
 
From the very start you will need to speak with potential lenders/investors, to bounce your business idea off them. Can you convince them that your potential business fits a set of needs/demands in the marketplace? If so, you’re on the right track. If not…you will need to entirely rethink your offering.
 
Speak to the people that most closely resemble your ideal customer, in order to gauge their interest/receptiveness to your product/service offerings. How much would they be willing to pay for your product/service?
 
Create a demo or beta version that can be tested by a select few trusted power users. Become a subject matter expert in the industry your business will compete in. Begin writing articles, white papers, and case studies on the topics associated with your business, products, services…anything to build your reputation/personal brand.
 
Develop a consistent brand on your social media profiles from Twitter to Facebook, LinkedIn, Pinterest, MeetUp, MySpace. Begin monitoring your brand by searching on your name in Bing, Yahoo, and Google every few weeks.
When you start your business, your personal brand will be synonymous with your corporate culture. you must have a written vision statement, mission statement, and a written code of ethics to represent your new business moral compass. Your written standards of ethical behavior will guide you through the life of your business, define your business dealings, how you treat employees, set forth what you want to leave behind. Call it a road map for your organization’s future social corporate responsibility.
 
Understand that while you cannot expect to excel at every phase of running a business, you WILL have to have a basic knowledge of marketing, sales, product development,
leadership, human resources, operations, financial planning, accounting.
 
Whatever areas you rate yourself a 6 or less on a scale of 1-10 (1 being absolutely clueless, 10 is technically expert) then you need to acquire additional skills, training ,exposure in those areas.
 
Spend LOTS of time with entrepreneurs, start-ups, and folks that recently launched their own businesses. Learn from them as much as you can about their lessons learned, what they would do differently, what advice they have.
 
Find as many local resources in your community to support your fledgling business, from business incubators to economic development centers, SCORE, WIBO, SEEDCO/ New York City Business Solutions Center, economic development centers, small business development centers, to business planning competitions. Many colleges and Universities are funding/partnering with private industry to form start-up initiatives.
 
Will you qualify for special city, state, and/or federal business start up funding or grants. Will your business be a minority or woman run business? If so, you may be eligible to receive start-up funding assistance.
 
Defend your intellectual capital (patents, trademarks, and copyrights) from the very beginning. If you are developing new products, offering new services..whatever new ideas you’ve developed…defend them at the very outset.
 
Here’s to your new business success.

Great Business Sales Strategies

To Grow Your Buinesss Befriend Your Customers, Part 2

Apply great sales strategies with existing customers to grow your business.

 
In part one of this post, We left off with great business sales strategies by discussing the Pareto Principle and Dr. Joe Juron’s work, that proves that 20% of your very best customers are responsible for 80% of your sales. Existing customers contribute 50% of your new sales, and refer 35% of your new business to you. So, your very best customers bring you 85% of your business.
 
What are you doing to communicate with them on a regular basis, and how do you deliver amazing, exceed their wildest expectations service to them, so they scream “Wow?”
 
It’s important to understand that the sbest sales strategies take into account the time-tested four (4) stage sales process:
 
1. AWARENESS: Your marketing efforts reach out to your ideal prospects and let them know all about you, your products and services.
 
2. EXPLORATION/EXPANSION: Once they know you exist, you have to get them to “try” you, using strategies like free trials, free consultations, limited time special offers, etc. There is a natural “attraction” that the potential customer has with you (your firm.) Then your relationship with that customer experiences “norms” or patterns of behavior” which are typically how the customer becomes comfortable engaging with you. You begin to build their trust every experience they have with you. At that point you can begin to exert some power, defined by your company’s ability to influence potential customers.
Lastly comes customer satisfaction with you. This is absolutely mandatory, before they can emotionally commit to engaging you in the ‘Buyer/Seller’ process .
 
3. COMMITMENT: Here comes the challenging part. Once they know you exist and they have tried you in a non-committal way, you have to get them to commit to you by making that always critical first time purchase, then the second, and third, and subsequent purchases until they become your raving fans. A key consideration is how much does each party contribute to the relationship, how much do you and your customers invest in the relationship, and how consistent are you in nurturing the exchanges you have with your customers. This is where most of my clients fall short.
 
4. DISSOLUTION: Sadly ALL relationships come to an end. At the last stage either your customer leaves you, or you decide that it’s no longer worth it from a profitability standpoint to retain them as your customer. Better options come along for your customers, or perhaps you neglect your customers (esp. online), or they experience a major failure by your organization (typically poor service.) Sometimes, your customers will outgrow your products/services.
 
How Your Customers Create Value For You
 
Your customer relationships increase your business’s profitability the following THREE (3) ways:
 
1) It costs MUCH less to service existing clients than it will for you to generate new ones.
 
2) Your existing clients are willing to pay a higher price for your products and services.
 
3) The strong buyer-seller relationships you have with your best customers increases the likelihood that customers will share their personal information which can help you customize offerings and sell more effectively to them.
 
Define Each Customer’s “Lifetime Value.”

 
In order to know how much a client may contribute to your firm, you need to determine their “expected” lifetime value. Remember the PARETO Principle matters, and you MUST be able to identify your top 20% of customers – they create 80% of your business. You MUST have a database of past customer purchase activity to complete this exercise successfully. Remember that a profitable/unprofitable customer today is an unprofitable/profitable one tomorrow. In order to tell the difference, you have to KNOW about each customer, which requires ongoing…COMMUNICATION! Consider how many referrals each customer has made to you. The more referrals…the MORE valuable they are.
 

Use The RFVP Model to Size Up Your customers

 
R – Recency, when was the last time they purchased from you.
F – Frequency, how often do they buy from you.
v – Volume, the average size order they place with you.
P – Profit, how much do they contribute to your business profitability. The sweet spot for profitability
are those customers that buy a lot from you but don’t place many demands on you to service their account.
 
Create an Action Plan to Develop Your Apostles (Raving Fans)
 
Conduct a formal needs assessment to see what needs your best customers have. Develop set of CUSTOMIZED solutions just for them.
Convince these existing clients to implement even a few of your recommendations. Review your service plan WITH THEM every year.
Target an initial list of twelve existing customers to convert to Apostles.
 
Three Steps to Gain Apostles
 
1) Write down the names of all your existing apostle clients.
 
2) Write down a comprehensive list of what it takes to keep them with your business.
 
3) Write a list of clients to convert to apostles NOW. The number should be roughly TWO TIMES your existing apostle clients. Why 2X your existing number of customers? Research shows you will be able to convert 50% of your repeat clients into apostles every year, so you’ll keep this up until you reach the MAGICAL “12.”
 
How To Sell to Your VERY Best Customers
 
Follow your customer conversations online by checking in regularly with social media, your customer online user forums, chat rooms. Align your sales, marketing, & product management efforts so they are in perfect harmony and all support each other/work well together. “Touch” / communicate with your customers
several ways, including phone calls, email, direct mail, tweets, instant messaging, Skype, etc.
 
Focus (TAILOR) your presentations on their specific challenges, NOT what you offer. Become more visible to them by attending the same trade shows, industry events, and annual conferences they go to. Nothing shows them you are there for them by being there with them. Write definitive articles in the publications/blogs
they read so they see you as the resident subject matter expert in the fields, industries, sectors, trends that matter most to them.
 
Facilitate roundtable discussions with your best clients to talk about the trends and developments (healthcare reform, small business employee benefits, cloud computing, etc.) that will have a direct bearing on their future business success.
 
Here’s to your business success. Have a GREAT fourth quarter!

To Grow Your Business, Befriend Your Customers

Where Have All Your Best Customers Gone?

How to Leverage Your Customers For New Business.

 
PART ONE
 
I have been thinking a lot lately about a conversation that I have had hundreds of times the past four years with business owners, ever since I launched my business consulting firm to help business owners, start-ups, and entrepreneurs achieve sales success. The conversation goes something like this:
 
My Customer: “I need your help finding new customers.”
 
Me: “Why”
 
My Customer: Stares at me like I have 3 heads. “What do you mean…’why?’ I need to acquire new business in order to keep my business running, so I need new clients.”
 
Me: “I understand. But what about your current customers?”
 
My Customer: Now stares at me like I have 4 heads. “What do you mean? Why would I focus on my customers? They already know what products I make and services offer. I need MORE customers to grow my business”
 
Me: Grab my head with both hands as I scream “OYE!”
 
This MAY be the single biggest problem facing small business owners today. In their pursuit of new client acquisition in these demanding times, business owners lose sight of just how critical it is to deliver exceptional client relationship management to their best customers.
 
In these turbulent times, it’s critical that business owners remain in touch with their top accounts. Take your best clients to breakfast. Reassure them that you are here for them, and will continue to do so and support them when they need you. Why not accompany them on their sales calls, to see first hand the challenges they face in selling to their own customers?
 
Learn your best customer’s pain points, so you can deliver exceptional solutions to the problems that keep them up at night. Have you created a detailed profile of your absolute most valuable customer? Can define and describe your best customers in complete detail? If yes, great! If no…well, how are you going to find other (new) customers that are JUST LIKE THEM? Do you have a strategic networking plan that lists all of the key events, trade shows, and conferences that your best customers attend? No? You should. How else will you know where your best customers are going to be, so you can coordinate strategic efforts to meet with them?
 
Your existing customers deliver 85% OF YOUR BUSINESS to you! Most small businesses obtain 50% of their new business from their existing customers. That’s half your business coming from existing customers. On top of that, 35% of your NEW customers are referred to you by your existing clients. That means…85% of ALL small business sales comes from their existing customers. According to Inc. it is 5-10 times LESS expensive to serve existing clients than it is to obtain new customers. On top of that, existing customers buy 67% more on your products and services than new customers do. So if you want to grow your business, you MUST re-focus your sales efforts on serving your BEST customers first, then on new client acquisition efforts.
 
Reward Your Customers Like Loyalty
 
Reward your best customers. Offer them truly meaningful loyalty programs that they care enough about to participate in. Do you provide your best customers with specific discounts, honor ANY of their returns, wipe out their existing balances on small amounts when they keep buying from you? Do you provide them with coupons they value? Do you deliver them promotional offers that only they are eligible for? Do you have a rewards program that serve up rewards based on their specific interests, and the things they value? Or, do you take a “one-reward-for-all” approach that means little to MOST of your clients?
 
Of the $48 billion worth of perceived value in reward points and miles distributed by American businesses annually, 33% goes unredeemed by consumers. 1/3 of ALL reward points for ALL businesses goes unclaimed!!! Companies lose significant money on wasted time and effort, and customers get NO REAL VALUE from the businesses to which they are most “loyal.”
 
Only 20% Of Your Customers REALLY Matter. A Dirty Truth.
 
Vilfredo Pareto was an Italian economist and sociologist who developed a mathematical formula in 1906 (today its known as the “80/20 rule”) to explain the extremely uneven income distribution in Switzerland. He found that most for the wealth in the country was consolidated within a very small percent of the population (sound familiar, my fellow Americans?)
 
In the 1940s Dr. Joseph Juran (an American) took Pareto’s work further by researching many different industries and companies of all sizes. He found that in every aspect of business & industry, in any set of data a relatively small percent of the entire data sample (Juron proved that amount at 20%) are statistically significant (vital) and 80% of any data set are relatively trivial. Juron found that this was true in all instances.
 
The beauty of Juron’s work was, it could be applied equally to any endeavor. What does this mean for small business owners looking to maximize their existing customers, you ask?
 
* 20% of Your clients generate 80% of your entire business.
* One in five of ALL your clients place 80% of all your company’s orders.
* 20% of Your customers purchase 80% of Your stuff!
 
The key challenge to any business owner looking to increase their new business is: Who are the top 20% of your very BEST customers, and
 
WHAT THE HECK ARE YOU DOING TO MAKE THESE FOLKS AS HAPPY AS POSSIBLE???
 
In my next issue, I’ll tell you how you can find your top 20% and do everything in your power to keep them buying from you.

Embrace Chaos and the Unfamiliar for Business Startup Success

Embrace These Chaotic Times to Be Successful.

These Transformational Times Are Ideal to Start a Business.

 
Humans are creatures of habit. We search for and embrace the familiar. It is critical that we derive meaning and order from our lives. In fact, we go out of our way to pursue the familiar. It’s why we stay in the same job for years, despite being unfulfilled professionally. It’s why so many people work in the same industry…out of fear of starting a new career in our middle years. Ever notice how you follow the same route to go to work and come home EVERY day? We eat the same type of food, and see the same types of movies. We are “creatures of habit.” But why?
 
The human species has evolved and adapted to extreme environmental duress, because we possess the ability to adapt successfully. Adapting to chaos and upheaval is embedded into our DNA. Humans MUST adapt in order to propagate the species. In the revolutionary book on how great companies fail: “The Innovator’s Dilemma“, innovation expert Clayton Christensen writes that even outstanding companies that do everything right can still lose market leadership or disappear completely. Focusing on “disruptive technology,” Christensen shows why most companies miss out on new waves of innovation.
 
It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” – Charles Darwin.
 
Nature demands that we change. Nature gravitates towards perpetual disorder. In science the term for a gradual decline into disorder is called “entropy.” So, why are we so resistant to change and why do we work so hard to avoid the unfamiliar, when finding new approaches is what ensures our survival?
 
What can you do if you are a business owner or business start-up and your organization is “stuck?” Are you too big to be a small business, but too small to be a big business? Then you are caught in the cross-hairs of change and how well you do (OR DON’T) adapt to change will impact whether you stay in business or not. Not all businesses go through successful transformations. Great article summarizes research by the Business Transformation Academy on why some companies do achieve amazing business transformation (think IBM from computers to consulting) and some don’t (Borders bookstore, circuit City, etc.)
 
The reality is, we are MOST successful when we embrace chaos and pursue change. Darwin got it right with his “survival of the fittest.” We humans live with one foot firmly planted in two separate two worlds. While we demand order in our lives, order is impossible to sustain. We thrive when we embrace change regardless of how painful it is to navigate through those turbulent waters. It is in our best interest that we aggressively pursue the unfamiliar. Humans are a direct result/product of the ability to evolve and adapt. Ever get really frustrated that things are done a foolishly outdated way at your work? when you ask why things are done a certain way do you cringe when someone replies: “That’s how it’s always been done around here.” Are you afraid of change? you can find tips on coping with change from noted motivational speaker Mike Robbins.
 
From chaos comes great opportunity for business start-up success, but only if we approach it as such. It does no good to run and hide from change as a potential threat to our existence. There are no guarantees in today’s global contract workplace. Organizations with hundreds of thousands of employees and offices in dozens of countries deemed too big to fail have done just that.
 
What does the future hold in store for us as we humans adapt? Who knows! But if we charge bravely into the unknown we are guaranteed to hit gold. By tackling the unfamiliar we are close to unraveling the mysteries of the human gene sequencing project. We have achieved tremendous advancements in technology such as artificial intelligence, supercomputers, robotics, fiber optics, splitting the atom, etc. Mankind has conquered space and the human brain. What if we were willing to boldly go where no man has ever gone before? We Americans should be undertaking ridiculously challenging projects to set our nation back on course.
 
Don’t listen to the Naysayers who tell you something can’t be done! Don’t buy into now NOT being the ideal time to start a business or pursue a new business venture. Don’t follow the herd like lemmings over a cliff. Run from the conventional wisdom. Be different! Take risks and dare to fail greatly.
 
Don’t ever believe you can’t change the world.

 
Be visionary. Be GREAT!