I work with a lot of small and medium sized businesses. The reason I do so is because I believe in them first and foremost. I believe they represent our future here in North America because they represent economic diversification and they find opportunity in areas big business won't. Finding that niche market isn't easy and sustaining it can be even harder. What I do is help sustain.
In the business world today, Small and Medium Sized Enterprises (SME's) have a few common issues: they have limited resources; very smart and capable people; insufficient demand; and they're excellent at what they do-at least operationally.
When it comes to strategy, many SME's understand they should have one and yet the implementation seems always to be on the B list of To Do's.
One of the problems that crops up in strategy sessions is the perceived need of being all things to all people. Doing this is expensive and risky. What you want is a better understanding of Who your business really wants as a client and then develop the strategy to support the way you go about marketing and distributing your product or service.
If you can think of the market as having three kinds of clients you'll see better what I mean.
We all will have a primary motivation and some secondary motivations behind that:
* Cost Conscious
* Service Conscious
* Gadget Conscious
People carry some blend of these with one of them being dominant. Think of yourself when you go out to buy something-it's not typically just the cheapest, or just the best service or just the newest gadget; it's often a blend of the three.
* Do you need the latest and greatest and are you willing to pay a premium for it? And do that again when the next generation arrives? And again?
* Or do you need something that works well, lasts forever and you'll pay a premium for that?
* Do you always buy something somewhere that's more expensive (in terms of time or money) than elsewhere but you go just because the service rocks?
* Or do you need something that will fill the gap right now and all you need is the least expensive version out there?
* Do you buy somewhere that's always the cheapest even though the service is terrible and the place a mess?
These are all combinations you need to consider in your business so you can build a culture within to support the combination.
Cost Conscious: Your competitive advantage comes through effectively reducing costs; therefore your emphasis in your business supporting the cost conscious client is one in which you must value quality, safety, productivity, internal reliability, efficiency and systems. You need to eliminate problems, mistakes and costs. Customer support must be reduced and expectations will have to be managed accordingly. Disciplined teamwork and efficiency will be something you want to focus on. You need the right kind of people in place to do this.
Service Conscious: Finding solutions is the emphasis here. Building lasting, profitable relationships is key and customization is the way. The Principle of 80/20 is top of mind where you understand that 80% of your profit comes from the top 20% of your client base. You know who these clients are and put your best people on them. Regular contact and targeted referrals will grow your business well. Don't make the common mistake that the clients who you end of talking to the most are always the most profitable---sometimes these are your biggest strain on scarce resources. Evaluate the numbers and understand the metrics. Sometimes you'll be surprised that you've never even heard from some of these people. But you want them to understand you value their business and you want to treat them well. Values which support building relationships and focus on the client are items you need to promote. You need the right kind of people in place to do this.
Gadget Conscious: Delivering the Next Generation Of has its merits for those who care. This is the next generation of planned obsolescence. Delivering the Next Generation ahead of your competitors means you need to prepare your markets to spend money on things that may not have existed before. In today's technology driven world this happens faster and faster. It means when you're building your business you must to focus on creativity, R&D, new ideas, concepts, design and timing. Your people need to be focused on the future, enjoy experimentation, engage in dialogue, talk ideas out and be open to new ideas. You need the right kind of people in place to do this.
How do you get the right kind of people in place to do this?
First of all, understand you can't just put all your eggs in one basket-you need to have some level of price consciousness even when your service levels are the best in the industry. And despite the best service in the world---no body will buy from you if the product doesn't hold up to the client expectations. You also have to solve the client problem at some level when you're competing on price-you just have to make sure you don't have many client problems through decent quality, managing client expectation and lots of FAQ's so clients can solve the issue on their own without your intervention. So it's very important to have the right kind of people in place doing things in your business to support the function. It's the blend that makes the difference.
There are two ways to get the blend right: Your strategy around hiring needs to incorporate the appropriate questions, understanding and evaluation to understand better who you're bringing on board in what role. This will sustain the future.
For your current staff you can undertake an evaluation of what their values are to ensure the values are aligned to meet the needs of the business. If you've not been aware of this in the past---expect that you'll be perceived by those whose values aren't aligned with those of the firm to be rocking the boat. Eventually they'll move on...and it's best for both of you. What you'll loose in misaligned values you'll gain in better relationships with your clients-regardless of which motivation rules their behaviour.
Mark works with business owners seeking to enhance value and add strength to their management team without hiring full time senior level staff--a great way to grow your business in this tough economy.
Mark's site address is at: http://www.markoverbury.com and http://www.undergroundexecutivelab.com/
Mark uses his experience partnering with senior level management to bring a fresh, objective perspective, new strength to the management team and helps guide strategy and assist in the better execution of the business plan.
Please feel free to talk to Mark any time--the first 45 minute consultation is entirely free where we'll get a sense of each other and determine what to do next to move your project forward.
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