by Anne Alexander
As someone who has been providing small business consulting services to small business owners for the past eight years, I have had the privilege of seeing what works and doesn’t work in many small businesses. Not to mention the 20 years I spent in small business before that, owning and running companies.
In order to help small businesses and their owners to thrive, I’ve put together this mini guide. I’m sure that whether you are just starting out or are a more seasoned business person, you will most likely get a few flashes of insight or recognition that will help you improve your business today.
Peter Drucker is famous for once saying that there are really only two core functions of any business: marketing and innovation – and that the rest are all costs. In this guide, I’m adding what I think are two additional core components for today’s small business person: productivity and planning for profitability. To me, this four legged stool provides you with a strong foundation from which to steer your business ship to continued and greater success.
INNOVATION: VALUE DELIVERY
First, our business must provide innovative products and services – ones that clients and customers need or want. The more we can put some extra value into our products and services, the more we can help people enjoy or benefit from them in a more effective or enjoyable way (innovation), the better we have served them and the better our business will do.
For example, I put extra value into my small business consulting services by giving my clients writing and editing help (this is very popular), free books when I think of one that would really help them (without overloading them with yet more to read!), birthday cards and other gifts to let them know I truly care about them and appreciate them being clients of mine, and in-person meetings when I am in their city or town.
Actually, innovation is typically what entrepreneurs love to do. So this one isn’t as tough, typically, as the other three legs.
MARKETING: GETTING THE WORD OUT, BRINGING THE PROSPECTS IN
I’d say a good portion of small business owners hate business development marketing. This is true despite the fact that they are in most cases the best ones to lead the marketing charge because of their passion for their products and services, their personal compelling story and their drive to have their company succeed.
Marketing for small business is, of course, how we get the word out to prospective customers, how we bring in the leads that our sales processes can then sell to. Small business marketing is of course a massive topic, and yet it’s easy to make it an overly
complex process, too. So here are three keys for marketing success.
#1. We have to start with WHO you think your target market is, or your “ideal client” as some like to call it, and work backward from there. There isn’t much in the world that “everybody” needs or wants. Even with such fundamentals as the food we eat, what one person chooses to eat can vary tremendously from the next guy or gal. So you MUST know WHO your business serves and then you must learn as much as you can about those people – their demographics, such as age and gender, location, and income, education, of course, but also their psychographics – attributes relating to personality, values, attitudes, interests, or lifestyles.
Then use all you have learned and make sure your marketing (including headlines and copy) really address the needs and wants of those people. Every business can be different, noteworthy and focused on a specific niche or demographic/psychographic.
#2. One key business marketing strategy is to use direct response marketing, not image or brand marketing (leave that to multinational corporations that sell to the mass consumer market like car companies, Proctor & Gamble, et al). You need marketing that incites the prospect to take an action and that action needs to be measurable. Then make sure you measure it! Track it. Tweak it. Rinse and repeat forever.
Remember the line about he business owner who says “50% of my marketing works great; I just don’t know which 50%”? You can’t afford to waste 50% of your marketing dollars or the time you and your team put into it.
#3. You need to be innovative, somehow unique, have a message. Don’t be afraid to be different – embrace it! It’s an interesting thing to me about the name of my company, Authentic Alternatives. I really liked it at the beginning, of course. A few years later I thought to myself “What a stupid name – nobody knows what it means, it’s not about business per se” – all those self-critical voices we get in our heads. Then a few years later I realized it really is a great name for my business, because it attracts the right kind of clients to me – business owners who march to the beat of a different drummer, who truly think outside the box, who want to be real (authentic) and who aren’t afraid to think a bit “alternatively.”
My advice to business is to make your business ABOUT something, like the way Subway repositioned itself to be about health and even weight loss. Pretty good trick for a fast food corporation!
It’s not easy getting noticed in this world of 7+ billion people and billions of marketing messages everywhere 24/7. So if you and your products need to be a little bit eye-opening and remarkable to reach the level of success you deserve.
PRODUCTIVITY: LIFE IS SHORT
As owner, if most of your day is not spent on innovation and/or marketing, you’re probably having a lot less success than you could be having. In the business coaching services I provide to business owners from a wide variety of industries, the same productivity principles apply, regardless of type of business. You must:
1) Manage your priorities
2) Manage your energy. (a better answer to time management for small business owners!)
Let’s look at each of these briefly.
Managing Priorities
Everyone knows they need to manage their priorities, but what does this really mean? The fact is, we all have too many priorities and too little time.
If you haven’t heard the story that Steven Covey, author of The Seven Habits of Highly Effective People, passed along, it’s worth repeating. Pretend that a big glass jar represents your life. You have a bucket of sand and the sand represents all the hundreds of little things you need to do each day and every week. You have a bucket of big rocks and they represent your top priorities – the things that if you focus on them will bring you the true rewards you want from your business and life. If you put the sand in first, you won’t have room to cram in very many rocks. But if you put the big rocks in first, you can then pour the sand in and it will fill in all the space very nicely and it will all fit!
What this means is on a weekly and then daily basis you must decide what your big rocks are and then schedule them into your calendar. All the other stuff WILL either get done or if it doesn’t, your life won’t end.
In my small business coaching services, I recommend to my clients that they start by picking just three big rocks for the week and focus everything they can on those until they are done. My clients are high achievers, go-getters who set the bar for themselves very high. Most of the time – too high.
Even though they get a tremendous amount of work done, they continually feel either like failures or like they aren’t realty making progress. In fact, the opposite is usually true. They ARE making very good progress.
We need to open our eyes and be more aware of what the activities are that will truly move the ball forward for our business. If you know you really needs to upgrade your website for example but never seem to get around to launching the project, clear the decks!
Your email can wait, Twitter and Facebook can wait, your laundry can wait, doing someone’s performance review can wait.
You have to be RELENTLESSY FOCUSED on your big rocks. If you aren’t, the tsunami of “life” will roll over you and carry you far, far away at best and kill you at worst. So you must RUTHLESSLY protect your time and focus.
You have to develop a killer attitude toward your time, be as fiercely protective of it as a mother lion of her cubs.
If you have an open door policy, change it. You have to create chunks of time every day which are UNINTERRUPTED, meaning no drop ins (unless the building is on fire), no email (turn off sound alerts if you use them), no phone calls (let your voicemail take messages), no cell phone.
Think back to when you had a job and you went into the office on a weekend – how incredibly productive you were. Eliminating interruptions and distractions is a hugely important productivity strategy. Your customers, staff and family can live without you for a few hours. Really.
Managing Energy
What about managing energy? If you ever read The Power of Full Engagement by Loehr & Schwartz, you had your eyes opened about the fact that it’s not so much about time management as energy management.
Most small business owners run on adrenaline to fuel their endless activities. We know intellectually at least that long term a healthy and happy life cannot be sustainable if we run on adrenaline a lot of the time. None of us will fall apart if we have a cup or two of coffee, eat a candy bar now and then or short change sleep occasionally. However, if we overdo these, we will sooner or later start to be incredibly fuzzy and ineffective and head straight toward total burn out. Burn out can come in many forms, such as a failed business, a heart attack or a failed marriage. The Japanese even have a word for it: karoshi – death from overwork.
There’s been a ton written about work/life balance and the fact is running and growing a business is not for the land of “ideal work/life balance.” But what we can do is incorporate energy rituals into our daily lives. These are simple practices that take little time but serve to dramatically restore our energy and focus, our enthusiasm and commitment to the multitude of tasks at hand in running our businesses.
The term “creatures of habit” is incredibly important here – because all of us truly are creatures of habit. A huge percentage of what we do and think every day is habitual, meaning we don’t really think about it. This is a curse (if we have a bad habit) or a blessing (if we have a good one). If we can set up and program ourselves with just a couple key habits for positive energy management, we will experience a powerful and profound difference in how we feel about our business and in how well our businesses actually do!
So what am I talking about? An energy ritual will be unique to you and what it is that restores you. Since most of us overtrain emotionally & mentally and undertrain physically and spiritually, most of us need energy rituals that focus on the physical and spiritual.
Examples from clients of mine include:
- 10 minute break in your office doing a few stretches or yoga poses.
- Putting on your headphones and listening to music you love for 10 minutes.
- Reading 10 minutes from a book you find inspirational (e.g. the Dhammapada, the Bible, Tony Robbins, Martha Beck, etc.)
- 15 minute walk outside.
- 5 minute closed eye meditation break.
You want to put these into your daily routine and on your calendar when possible to take an energy break mid-morning and mid-afternoon. Also mid-evening if you’re working late. Implementing these energy rituals will take simple, small steps and will give you and your productivity a huge pay off.
Here are examples of the old paradigm (on the left) and the new paradigm (n the right):
Manage time ==> Manage energy
Avoid stress ==> Seek (positive) stress
Life is a marathon ==> Life is a series of sprints
Downtime is wasted time ==> Downtime is productive time
Rewards fuel performance ==> Purpose fuels performance (Intrinsic motivation provides more sustaining energy. i.e. wanting to do something because we value it for the inherent satisfaction it provides (versus extrinsic – money, approval, social standing, power, love)
Self-discipline rules ==> Rituals rule
The power of positive thinking. ==> The power of full engagement.
There’s a lot more to this, but I think even this info gives you an idea of how radically effective this new paradigm can be in your life.
PLANNING FOR PROFITABILITY: FINANCIAL MANAGEMENT
We’ve talked about the key things you need to know in marketing and productivity. The third leg of the stool is financial management. If you hate thinking about financial management, you have all the proof you need to understand why 90% of business failures are caused by a lack of financial management, not sales or marketing management!
Most entrepreneurs are great at innovation and creating new products, services and markets. They’re usually good at marketing and are able to be pretty damn productive, even if it may be in a chaotic way that’s less effective than it could be.
However, most of them struggle at financial management (in the beginning, at least, and often for years). The thing is, you don’t have to become a bona fide CPA! (You need a CPA, but you don’t have to BE one.) The cool thing is you’ll start to enjoy the feeling of power and control that you get once you have your arms around the basics and start to create and use some key metrics – critical indicators of how things are going in your business on a daily or weekly basis.
Yes, of course, you need to have your books done regularly, hopefully by a skilled bookkeeper. You need to review P & L’s monthly. But more than that you need to create a plan to be profitable, deciding what your financial goals are for the year and how you’ll get there and setting up a simple spreadsheet that compares your projections with actuals.
Although it is a popular tactic, it doesn’t actually help to stick your head in the sand when things aren’t going well. Knowledge – even when painful – is power. With the proper knowledge about how your company is doing financially, you can be successful. If not, there is a high chance that you’ll be closing your doors within a few years. Especially when times are tough. Like in a “great recession” (they aren’t going to say “depression,” are they?!)
In providing my advice for business, I make sure my clients have a solid profit plan and a good understanding of margins. And I help them identify those critical indicators they need to keep their finger on the pulse of their business.
IN CONCLUSION
Running and growing a small business can seem really complicated. So we have to apply models and systems that help us simplify things and get our arms around our businesses, both conceptually and then in actual daily practice. I hope that understanding these four legs of innovation, marketing, productivity and profit planning will help you do just that.
Article (C) Anne Alexander http://www.authentic-alternatives.com/
In order to help small businesses and their owners to thrive, I’ve put together this mini guide. I’m sure that whether you are just starting out or are a more seasoned business person, you will most likely get a few flashes of insight or recognition that will help you improve your business today.
Peter Drucker is famous for once saying that there are really only two core functions of any business: marketing and innovation – and that the rest are all costs. In this guide, I’m adding what I think are two additional core components for today’s small business person: productivity and planning for profitability. To me, this four legged stool provides you with a strong foundation from which to steer your business ship to continued and greater success.
INNOVATION: VALUE DELIVERY
First, our business must provide innovative products and services – ones that clients and customers need or want. The more we can put some extra value into our products and services, the more we can help people enjoy or benefit from them in a more effective or enjoyable way (innovation), the better we have served them and the better our business will do.
For example, I put extra value into my small business consulting services by giving my clients writing and editing help (this is very popular), free books when I think of one that would really help them (without overloading them with yet more to read!), birthday cards and other gifts to let them know I truly care about them and appreciate them being clients of mine, and in-person meetings when I am in their city or town.
Actually, innovation is typically what entrepreneurs love to do. So this one isn’t as tough, typically, as the other three legs.
MARKETING: GETTING THE WORD OUT, BRINGING THE PROSPECTS IN
I’d say a good portion of small business owners hate business development marketing. This is true despite the fact that they are in most cases the best ones to lead the marketing charge because of their passion for their products and services, their personal compelling story and their drive to have their company succeed.
Marketing for small business is, of course, how we get the word out to prospective customers, how we bring in the leads that our sales processes can then sell to. Small business marketing is of course a massive topic, and yet it’s easy to make it an overly
complex process, too. So here are three keys for marketing success.
#1. We have to start with WHO you think your target market is, or your “ideal client” as some like to call it, and work backward from there. There isn’t much in the world that “everybody” needs or wants. Even with such fundamentals as the food we eat, what one person chooses to eat can vary tremendously from the next guy or gal. So you MUST know WHO your business serves and then you must learn as much as you can about those people – their demographics, such as age and gender, location, and income, education, of course, but also their psychographics – attributes relating to personality, values, attitudes, interests, or lifestyles.
Then use all you have learned and make sure your marketing (including headlines and copy) really address the needs and wants of those people. Every business can be different, noteworthy and focused on a specific niche or demographic/psychographic.
#2. One key business marketing strategy is to use direct response marketing, not image or brand marketing (leave that to multinational corporations that sell to the mass consumer market like car companies, Proctor & Gamble, et al). You need marketing that incites the prospect to take an action and that action needs to be measurable. Then make sure you measure it! Track it. Tweak it. Rinse and repeat forever.
Remember the line about he business owner who says “50% of my marketing works great; I just don’t know which 50%”? You can’t afford to waste 50% of your marketing dollars or the time you and your team put into it.
#3. You need to be innovative, somehow unique, have a message. Don’t be afraid to be different – embrace it! It’s an interesting thing to me about the name of my company, Authentic Alternatives. I really liked it at the beginning, of course. A few years later I thought to myself “What a stupid name – nobody knows what it means, it’s not about business per se” – all those self-critical voices we get in our heads. Then a few years later I realized it really is a great name for my business, because it attracts the right kind of clients to me – business owners who march to the beat of a different drummer, who truly think outside the box, who want to be real (authentic) and who aren’t afraid to think a bit “alternatively.”
My advice to business is to make your business ABOUT something, like the way Subway repositioned itself to be about health and even weight loss. Pretty good trick for a fast food corporation!
It’s not easy getting noticed in this world of 7+ billion people and billions of marketing messages everywhere 24/7. So if you and your products need to be a little bit eye-opening and remarkable to reach the level of success you deserve.
PRODUCTIVITY: LIFE IS SHORT
As owner, if most of your day is not spent on innovation and/or marketing, you’re probably having a lot less success than you could be having. In the business coaching services I provide to business owners from a wide variety of industries, the same productivity principles apply, regardless of type of business. You must:
1) Manage your priorities
2) Manage your energy. (a better answer to time management for small business owners!)
Let’s look at each of these briefly.
Managing Priorities
Everyone knows they need to manage their priorities, but what does this really mean? The fact is, we all have too many priorities and too little time.
If you haven’t heard the story that Steven Covey, author of The Seven Habits of Highly Effective People, passed along, it’s worth repeating. Pretend that a big glass jar represents your life. You have a bucket of sand and the sand represents all the hundreds of little things you need to do each day and every week. You have a bucket of big rocks and they represent your top priorities – the things that if you focus on them will bring you the true rewards you want from your business and life. If you put the sand in first, you won’t have room to cram in very many rocks. But if you put the big rocks in first, you can then pour the sand in and it will fill in all the space very nicely and it will all fit!
What this means is on a weekly and then daily basis you must decide what your big rocks are and then schedule them into your calendar. All the other stuff WILL either get done or if it doesn’t, your life won’t end.
In my small business coaching services, I recommend to my clients that they start by picking just three big rocks for the week and focus everything they can on those until they are done. My clients are high achievers, go-getters who set the bar for themselves very high. Most of the time – too high.
Even though they get a tremendous amount of work done, they continually feel either like failures or like they aren’t realty making progress. In fact, the opposite is usually true. They ARE making very good progress.
We need to open our eyes and be more aware of what the activities are that will truly move the ball forward for our business. If you know you really needs to upgrade your website for example but never seem to get around to launching the project, clear the decks!
Your email can wait, Twitter and Facebook can wait, your laundry can wait, doing someone’s performance review can wait.
You have to be RELENTLESSY FOCUSED on your big rocks. If you aren’t, the tsunami of “life” will roll over you and carry you far, far away at best and kill you at worst. So you must RUTHLESSLY protect your time and focus.
You have to develop a killer attitude toward your time, be as fiercely protective of it as a mother lion of her cubs.
If you have an open door policy, change it. You have to create chunks of time every day which are UNINTERRUPTED, meaning no drop ins (unless the building is on fire), no email (turn off sound alerts if you use them), no phone calls (let your voicemail take messages), no cell phone.
Think back to when you had a job and you went into the office on a weekend – how incredibly productive you were. Eliminating interruptions and distractions is a hugely important productivity strategy. Your customers, staff and family can live without you for a few hours. Really.
Managing Energy
What about managing energy? If you ever read The Power of Full Engagement by Loehr & Schwartz, you had your eyes opened about the fact that it’s not so much about time management as energy management.
Most small business owners run on adrenaline to fuel their endless activities. We know intellectually at least that long term a healthy and happy life cannot be sustainable if we run on adrenaline a lot of the time. None of us will fall apart if we have a cup or two of coffee, eat a candy bar now and then or short change sleep occasionally. However, if we overdo these, we will sooner or later start to be incredibly fuzzy and ineffective and head straight toward total burn out. Burn out can come in many forms, such as a failed business, a heart attack or a failed marriage. The Japanese even have a word for it: karoshi – death from overwork.
There’s been a ton written about work/life balance and the fact is running and growing a business is not for the land of “ideal work/life balance.” But what we can do is incorporate energy rituals into our daily lives. These are simple practices that take little time but serve to dramatically restore our energy and focus, our enthusiasm and commitment to the multitude of tasks at hand in running our businesses.
The term “creatures of habit” is incredibly important here – because all of us truly are creatures of habit. A huge percentage of what we do and think every day is habitual, meaning we don’t really think about it. This is a curse (if we have a bad habit) or a blessing (if we have a good one). If we can set up and program ourselves with just a couple key habits for positive energy management, we will experience a powerful and profound difference in how we feel about our business and in how well our businesses actually do!
So what am I talking about? An energy ritual will be unique to you and what it is that restores you. Since most of us overtrain emotionally & mentally and undertrain physically and spiritually, most of us need energy rituals that focus on the physical and spiritual.
Examples from clients of mine include:
- 10 minute break in your office doing a few stretches or yoga poses.
- Putting on your headphones and listening to music you love for 10 minutes.
- Reading 10 minutes from a book you find inspirational (e.g. the Dhammapada, the Bible, Tony Robbins, Martha Beck, etc.)
- 15 minute walk outside.
- 5 minute closed eye meditation break.
You want to put these into your daily routine and on your calendar when possible to take an energy break mid-morning and mid-afternoon. Also mid-evening if you’re working late. Implementing these energy rituals will take simple, small steps and will give you and your productivity a huge pay off.
Here are examples of the old paradigm (on the left) and the new paradigm (n the right):
Manage time ==> Manage energy
Avoid stress ==> Seek (positive) stress
Life is a marathon ==> Life is a series of sprints
Downtime is wasted time ==> Downtime is productive time
Rewards fuel performance ==> Purpose fuels performance (Intrinsic motivation provides more sustaining energy. i.e. wanting to do something because we value it for the inherent satisfaction it provides (versus extrinsic – money, approval, social standing, power, love)
Self-discipline rules ==> Rituals rule
The power of positive thinking. ==> The power of full engagement.
There’s a lot more to this, but I think even this info gives you an idea of how radically effective this new paradigm can be in your life.
PLANNING FOR PROFITABILITY: FINANCIAL MANAGEMENT
We’ve talked about the key things you need to know in marketing and productivity. The third leg of the stool is financial management. If you hate thinking about financial management, you have all the proof you need to understand why 90% of business failures are caused by a lack of financial management, not sales or marketing management!
Most entrepreneurs are great at innovation and creating new products, services and markets. They’re usually good at marketing and are able to be pretty damn productive, even if it may be in a chaotic way that’s less effective than it could be.
However, most of them struggle at financial management (in the beginning, at least, and often for years). The thing is, you don’t have to become a bona fide CPA! (You need a CPA, but you don’t have to BE one.) The cool thing is you’ll start to enjoy the feeling of power and control that you get once you have your arms around the basics and start to create and use some key metrics – critical indicators of how things are going in your business on a daily or weekly basis.
Yes, of course, you need to have your books done regularly, hopefully by a skilled bookkeeper. You need to review P & L’s monthly. But more than that you need to create a plan to be profitable, deciding what your financial goals are for the year and how you’ll get there and setting up a simple spreadsheet that compares your projections with actuals.
Although it is a popular tactic, it doesn’t actually help to stick your head in the sand when things aren’t going well. Knowledge – even when painful – is power. With the proper knowledge about how your company is doing financially, you can be successful. If not, there is a high chance that you’ll be closing your doors within a few years. Especially when times are tough. Like in a “great recession” (they aren’t going to say “depression,” are they?!)
In providing my advice for business, I make sure my clients have a solid profit plan and a good understanding of margins. And I help them identify those critical indicators they need to keep their finger on the pulse of their business.
IN CONCLUSION
Running and growing a small business can seem really complicated. So we have to apply models and systems that help us simplify things and get our arms around our businesses, both conceptually and then in actual daily practice. I hope that understanding these four legs of innovation, marketing, productivity and profit planning will help you do just that.
Article (C) Anne Alexander http://www.authentic-alternatives.com/
Associates, an international investigative and consulting firm. Before that, he was chairman of RAND’s Political advantages and disadvantages of food additives Science Department, where he also directed research on political violence.
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