Marketing Consulting Blog

Ever had one of those days where you question whether you've made wise business choices lately? Today has been one of those days, but I'm afraid the answers I uncover over the next few weeks aren't going to be to my liking. I know I violated my own gut instincts with one decision in particular, and I'm kicking myself for it pretty hard right now.

If you're in a business venture with others, is it clear to everyone involved whether the business could succeed without you or not? If the business could succeed without you, why do you continue to hang around in a decision making capacity? Why should your partners listen to you if the organization could survive without you?

If you bring nothing unique to the mix, and someone else is primarily responsible for the success of the organization, why not do the right thing and get out of the way by taking on a diminished role? It doesn't mean you have to leave completely, but move aside to let the others grow the business. Chances are you're not helping; you're in the way! I'm just sayin'.

Is the generation gap between Boomers and Generation X THAT wide?

Is new media good for business or bad?

How much do you engage in social media for your business? How's it working out for you?

Are there any business "secrets" anymore? What about new ideas?

Why is there such reluctance from the older generations to embrace new media and accept the fact that the new rules of journalism are vastly different from the good old days? There are newspapers and television outlets that struggle with this mightily, and my suspicion is those outlets are run by elder statesmen. Time to wake up, people! Or get out of the way to let the younger generation take the organization to the next level. I'm just pointing out the elephant in the room that everyone wants to ignore. Don't shoot the messenger!

If you could start any new business today, what would it be? What would be your first step?

Am I crazy to think $1 million isn't that much money and shouldn't be that hard for a business to generate?

Do you know of a sharp Internet marketer that is looking to be a part of a startup? How about a copywriter? If you do, please send them my way.

When starting a new venture, what's the first hire you make?

Enough ramblings and ponderings for now . . . would love to get your take on any or all of this.

Just about every business would like to improve their cash flow. Below are ten ways which may help your business achieve that objective rather quickly:

Bill Promptly; Take Advantage of Payment Terms

The faster you can invoice a client, the quicker the clock starts to tick for the customer to pay in order to meet the terms of the contract you both agreed upon at the beginning of the relationship. Conversely, if you’ve agreed to terms of Net 30 with one of your suppliers or vendors, don’t pay the bill immediately; wait a little bit to take advantage of those terms and keep the cash in your (hopefully) interest bearing account a little longer.

Offer Payment Incentives; Penalize Late Payers

Many times businesses set forth payment terms of Net 15 or Net 30, but they neither offer any incentives to beat those terms nor penalties if the terms aren’t met. Consider adding both to your invoices to decrease your accounts receivable days outstanding. Chances are most of your customers will pay promptly if there is an incentive involved.

Run Credit Checks on Potential Customers

While this sounds like a no-brainer suggestion, many businesses today take whatever business they can acquire and run checks only when problems arise. Often times it is too late to run a check after issues surface. It’s better for your business over the long haul to reject a customer immediately that slow pays or is consistently delinquent. Slow payers are frequently troublesome clients aside from their propensity to get behind on paying you—they are typically the impossible to please variety that will nitpick your organization and sap its resources.

Sell off Under Utilized Assets and Fully Depreciated Assets

Once an asset has run through its useful life and is no longer a depreciable asset, consider selling it off if you can get good value for it. You’ll get an influx of cash that can help you replace that asset or upgrade to a new technology or model and possibly reduce your debt in the process. Many assets will last well beyond their useful life so you may be able to fetch top dollar from a smaller business looking to improve their operation by adding used equipment.

Encourage Partial Payments

If your business is in a bit of a cash crunch, try encouraging your clients to make partial payments on the front end of projects or working arrangements. Most will be agreeable to such provided you make some concessions on your end such as small pricing incentive or discount to do so. This helps you improve your cash on hand while helping your client spread payments out so that everything doesn’t hit all at once in one lump sum.

Comparison Shop Suppliers Online

The Internet makes comparison shopping a breeze, and some of your vendors and suppliers may take you for granted by not adjusting their pricing to reflect current market and competitive pricing. By checking the competitive landscape every quarter or so, you can gain some leverage by knowing how much you should be paying for particular items especially those that are more commoditized.

Stick to Budgets

This is another suggestion that may seem rather obvious, but there are several projects that suffer budget creep throughout a fiscal year. A couple hundred bucks here or there may not seem like much for a particular project, but it will quickly add up if there are multiple projects going on across an organization.

Spread Out Payments; Don’t Pay All at Once

Spreading out payments through a month versus paying everything on one day can really alleviate a cash crunch due to the natural flow of business and customers’ payment preferences. All of the money due to you in a given month doesn’t come in on one day so why should all of the money going out? This little tip can save a lot of headaches even though the temptation to pay everything on one specific day to get it out of the way may seem logical at times.

Add a Shift Versus Taking on More Space

A lot of small to medium businesses are quick to add office or production space when it may be more cost effective to simply add another shift. If your business is a morning shift only operation, how much could you save by simply adding a second shift versus adding production capacity? Chances are you could save quite a bit of development and rental costs by better utilizing the space you have today.

Pay by Credit When Possible

Paying by credit seems to have a stigma attached to it, but it can buy you some extra time to stockpile more cash to pay things off if you play the terms correctly. Since there are also some low rate credit options available, it may be more cost effective to take on a little interest expense until the cash reserves are built up enough to pay things completely off.

Cash flow problems don’t have to cripple your business if you take a step back and evaluate your options objectively. Implementing a few of the tips above can improve things almost immediately and put you back on the right track to a positive cash flow.

After a lengthy bike ride last Saturday, I had some serious neck/upper back pain. It's somewhat common for me after longer rides (3+ hours), but I somehow aggravated the injury while I was (of all things) taking a shower the next morning. I figured it was muscle fatigue or a mild strain that would disappear after a couple of days. Didn't happen. After three days, it was time to bite the bullet and visit a professional.

There's a new chiropractor/massage/rehab facility that opened less than a mile from my home so I figured I'd pop in on them to see if they could help me. There was even a sign in the front window stating "now accepting new clients." Excellent! Not only are they convenient, they're actively seeking people like me right now. Or so I thought. I entered and told the girl behind the desk that I thought I needed a massage to work the kink out of my neck. She said "great, let me see who is available and if we can get you in today." Mind you, NO one else was even in the place from everything I could tell, and I saw three doctor/therapist types walking around as if they had some free time on their hands. After the girl looked at the computer schedule, she sheepishly looked up to tell me they could fit me in two weeks later, but they had nothing open until then. Another girl walked over as if she found that bit of information a little erroneous and suggested they might be able to fit me in the next Tuesday (today). The other girl said "no, that's not right because he's on vacation (meaning the therapist) so that wouldn't work either." They both agreed then looked at me like "sorry about your luck pal."

If I had agreed to go through testing with a doctor and undergo x-rays, an hour questionnaire, poking and prodding, I could have seen someone the next day, but I couldn't get anyone to help me with my immediate problem--the damn kink in my neck that was making it difficult to move my head around to see. If I had agreed to sign up for a treatment "program" (read: more expense), they might have magically found a massage therapist available. I left the joint a tad amused and a lot put off.

This incident was a further reminder that if you're going to open the doors and welcome in "new" business, be prepared to take it in whatever way it comes to you. Suggesting that you welcome new clients is suggesting you're not booked solid. Judging by the parking lot (I was the only car) and the doctors shuffling around as I stood there waiting to see if someone would be able to help me was further evidence that they definitely had room to take on more paying clients. They just don't have room to take on new clients that don't do things THEIR way (setting up an appointment weeks in advance, PLANNING for nagging injuries or aches, going through an insurance carrier, etc.) I was a walk-in customer that was prepared to turn over my credit card to receive immediate attention. I essentially had an open "budget" when I walked in there because the pain was strong enough, and I wasn't in a mood to haggle over pricing or fee schedules. To me, immediate attention (time constraint) was more important than what it might cost (budget constraint). I had no idea what quality might come from being a walk-in, but I was willing to roll the dice to get rid of the kink so I wasn't a difficult customer to please at that moment. They couldn't even mildly accommodate me though.

Having read all of this, what are the odds I'll return? They weren't prepared to do business on my terms--take my credit card, some information, and administer a damn massage. They wanted me to jump through their hoops at their pace JUST to do business. I wasn't a complicated case--just a simple massage today, please. Tomorrow I may decide I need x-rays and doctor assistance, but let me make that decision. Your policies and procedures shouldn't prevent you from taking someone's money and giving them what they want (within the broadest objectives of your overall business) as quickly as reasonably possible.

I worked in outside sales for two technology companies that I frequently challenged during sales meetings with this question:
"If a customer walked through that door RIGHT NOW and offered us cash to buy something we have in stock, could we sell it to them in less than 20 minutes?" You'd be shocked at the answer each time--it was "no, we're not setup like a retail outlet like that. They'd have to fill out customer information, a credit application, references, etc." What?!? To pay cash, they'd have to do all of that? Asinine and utterly amazing yet extremely true. That's how some businesses set themselves up though. Don't be one of those--be prepared to make it easy for someone to do business with you. Complicating things just to have a process or system in place is one of the dumbest things you can do if it doesn't make it easy for someone new to do business with you. That's common sense, but it's amazing how uncommon that is anymore.

Posted by Michael Cage on Friday, May 18, 2007

Just because marketing advice is repeated often ... doesn't make it true.

"Find a need and fill it ... that is the key to successfully marketing a business." - Someone who needs to be slapped around a little bit.

Truth is, follow this "find a need and fill it" advice and you are inviting commodity pricing.

Think about it...

People NEED to get their roof repaired ... but they WANT on-time, courteous service, clean workers and a guarantee their roof won't leak again.

People NEED a computer network set up ... but they WANT someone who understands their business, will suggest things to make it run smoother before a breakdown prompts it, and won't make them feel stupid by talking geek to them.

People NEED to have a cavity filled ... but they WANT to look good and have a pain-free experience in a friendly office with warm people.

People price shop for what they need, and even that makes them grumpy.

People pay premium prices for what they want, and they love it.

Go to an Apple Store. Play marketing anthropologist. Really observe the people. You'll "get it" in less than an hour.

Service business, retail business, business-to-business, whatever your business...

...if your business struggles with commodity pricing or if you have to "justify" your price more than once in a blue moon ... betcha an iPhone (ahem, another example) you are focusing on what your customers or clients need, and aren't paying attention to what they want. And that makes them begin to not want you.

Forget find a need and fill it.

Find a want, touch your market ... and lead a movement.

I talked about this in today's Aggressive Marketing & Entrepreneurship Daily Podcast (along with a discussion about when to release version 1 of your product or service, true entrepreneurial competencies, and how to stay passionate and energized in your business). If you haven't listened yet ... what are you waiting for? ... I'm on Episode #4. (Subscribe in iTunes.)

by André Taylor

Searching for the right business strategy, many organizations fall in love with big concepts. But for many, it stops there, as “doing” can be an elusive concept. In my advisory work, I suggest a systematic approach to tackling change comprised of an 8-week period of intensive focus, followed by a repeat of the process in 8-week increments throughout the year. Here are the eight big questions to explore during this process:

Week One:

What are the next 5 things we must do to get closer to our vision?

This is the hardest part for many organizations. We often have too many objectives. It is important to have a crisp vision, but even more important is developing a crisp daily focus. This focus should consist of a handful of clear objectives.

Week Two:

If we keep doing what we’re doing will we achieve our vision within our timeframe?

During the first week of our program, you’ve defined your focus and you’ve begun to take action. But once you begin, you are bound to see adjustments that must be made. You must now take inventory of where you are.

Week Three:

“Who are the people and partners best suited to help us reach our vision?”

Creating change in an organization requires the participation of many people with different talents, backgrounds and perspectives. Vendors, advisors, partners, mentors, and customers are all needed and we need multi-generational team members to shape our approach.

Week Four:

What are our potential and current customers saying to us indirectly?

Develop an attentive ear. Your audience is often telling you things indirectly about their likes, dislikes, tastes, and preferences. We may think we’re listening, but instead we are really thinking of our customers as a group, rather than individually.

Week Five:

How do we create a new, distinctive relationship with our audience?

Our objective is to reach a level of interaction with our audience that reduces and ultimately eliminates boundaries. We want to penetrate and understand the customer “psyche” and discover what’s beneath the surface.

Week Six:

How do I move into the view of new customers and partners?

New audiences want to feel like they’ve discovered you. Your role is to help them do this, by moving into their view. By partnering with other organizations, you will expose your business to new audiences.

Week Seven:

How are we managing the natural conflicts and complexities that arise?

Dynamic organizations are comprised of people with differing views, experiences, and competencies. We need a composite of organizational talents to advance our mission. We must also change the perception that disagreement is bad, or that there should be a penalty or stigma associated with failure.

Week Eight:

How do we follow through in the most efficient way?

Today’s environment requires highly focused periods of evaluation, ad hoc teams, a rapid assessment of the situation, and quick decisions. We must also trust individuals with an uncommon understanding of the situation who can “run” with their creative vision.

© Copyright 2007 – André Taylor – Taylor Insight Group, LLC. Go to http://www.andretaylor.com and get Andre’s free newsletter.

André Taylor is an award-winning entrepreneur, author, and advisor to growing companies and one of today’s dynamic voices on business and personal success. He’s the author of a collection of audio and video programs reflecting more than 25 years in enterprise management and the discipline of personal and organizational development. He provides an uncommon understanding of the lessons of business and personal resilience, and extraordinary insight and commentary on the subjects of entrepreneurship, leadership, sales, marketing, innovation, and growth.

In order to write a vision for your business, the first step is identifying who you really are and what is important to you.

Not what you DO or have been doing, but who you ARE.

You may be doing things that are really not in alignment with what is important to you in your business. It's critical to identify any of those discrepancies to redirect your efforts toward a successful venture.

List all the things that you don't want to see in your business. A great way to do this is to create two columns and make the list of your "don't wants" on the left and in the right column list what it is that you do want. This is sometimes referred to as the "T exercise" because of the T created by the columns.

It's easier to identify what is important to you if you think of what it is that you don't want first. We just seem to come to better choices that way. The important thing is to identify quickly what you do want without putting too much emphasis on the negative.

Areas to consider in this business analysis sound very much like ones you would include in a newspaper article: Who, What, What, Where, Why and How!

What products or services are planned? What image is important to you? What is your role as the owner? With all of these questions, first write what you don't want to have and then write the reverse to clearly identify your desires.

Next, you need to consider the location, the Where. What is the location of the business? Where do the customers come from? Where will various parts of your business be located?

The next W is the Who. You need to determine whom you don't want as customers and then clearly define who your ideal customers would be. Other considerations in this category are possible strategic alliance partners, and advisors who could be a support to your business growth.

Timing of your startup including completion of necessary facilities and systems is the "When" of the equation. A difficult area for many businesses is determining when it is the right time for expansion and delegation of responsibilities to allow for growth. The challenge is to do this without overextending their financial resources.

Probably the very most important category for consideration is the Why. Why are you creating the business? Just as important is the question of why your customers will buy what you are selling.

The How plays a key role in the climate of the business. How do you envision your interactions with employees, suppliers, and customers?

Taking all these categories through the process of writing what you don't want to see in your business and turning them around to the clear choice of what you do want will bring you to a list of desired characteristics. From this you can pull together a summary and then condense it into just a statement.

An example of a vision statement might be, "Within the next five years grow Widgets International into a $5 million international widget company providing custom-made widgets of excellent quality to makers of patio furniture." You can choose this simple format or one that is worded more in your writing style.

With the vision statement, you have a clear description of what you see your business doing in five years. You could also write this for a shorter or longer time frame.

All of the steps you worked through in this process will help you as you develop the rest of your business plan.

Your next step is to create a mission statement. The mission statement gets into more of the implementation of the vision you see. It is broad and then is broken down into the necessary goals, strategies, and plans to carry out the mission statement.

Step by step you are refining what you really envision in your business. You can start to answer that question, "Who Do You Think You ARE Anyway?"

Exuberant Productivity Coach, Suzanne Holman, MAEd, works with financial service professionals, realtors, and self-employed professionals determined to make every hour they work truly productive so they have quality time and abundant energy for fun and family!

For a FREE Exuberance Assessment and tips for increasing your productivity and having a more satisfying life, visit Exuberant Productivity.com

by Robyn Knapp

Winners in business play rough and don't apologize for it.

Toyota has steadily attacked the Big Three where their will to defend was weakest, moving up the line from compact cars to mid- and full-size vehicles and on to Detroit's last remaining profit centers, light trucks and SUVs. All the while, Toyota has dared its rivals to duplicate a production system that gives the company unmatchable productivity and quality.

Dell is similarly relentless, and ruthless, in dealing with competitors. Last summer, the day after Hewlett-Packard announced weak results because of price competition in PCs, Dell announced a further across-the-board cut – delivering a swift kick to a tough rival when it was down.

Wal-Mart is well known for its uncompromising stance toward suppliers. In 1996, Rubbermaid, a $2 billion business that a few years earlier had been Fortune's most admired company, ventured to contest Wal-Mart's pressure on suppliers to lower their prices – and Wal-Mart simply cut Rubbermaid off. (Newell acquired a struggling Rubbermaid in 1999.) Wal-Mart doesn't pull punches with competitors, either. In recent years, as Kmart floundered in bankruptcy proceedings, Wal-Mart rolled out a knockoff of Kmart's Martha Stewart product line, putting pressure on one of the tottering retailer's few areas of success.

Hardly anyone would dispute that Toyota, Dell, and Wal-Mart have epitomized corporate success over the past decade. But the raised eyebrows they provoke – recent BusinessWeek cover articles have included "Can Anything Stop Toyota?" "Is Wal-Mart Too Powerful?" and "What You Don't Know About Dell" – suggest there's something not quite kosher about the way they achieve that success.

That's because Toyota, Dell, and Wal-Mart play hardball. What do we mean by this? Hardball players pursue with a single-minded focus competitive advantage and the benefits it offers – leading market share, great margins, rapid growth, and all the intangibles of being in command. They pick their shots, seek out competitive encounters, set the pace of innovation, test the edges of the possible. They play to win. And they do.

Softball players, by contrast, may look good – they may report decent earnings and even get favorable ink in the business press – but they aren't intensely serious about winning. They don't accept that you sometimes must hurt your rivals, and risk being hurt yourself, to get what you want. Instead of running smart and hard, they seem almost to be standing around and watching. They play to play. And though they may not end up out-and-out losers, they certainly don't win.

This may reflect the recent emphasis of management science, which itself has gone soft. Indeed, the discourse around a constellation of squishy issues – leadership, corporate culture, customer care, knowledge management, talent management, employee empowerment, and the like – has encouraged the making of softball players.

"Hardball", George Stalk, Jr. and Rob Lachenauer, Harvard Business Review, April 2004. Visit CJPS-Enterprises for more information.

At CJPS Enterprises, we specialize in execution. Getting things done. Our approach is designed to give your company an unfair advantage. We have years of experience in the medical industry, a long list of contacts and access to the leading minds in healthcare. We're catalysts, analysts, managers, negotiators - experts in every aspect of raising capital and facilitating breakthrough growth. Visit us at http://www.cjps-enterprises.com

By Valeria Maltoni

Although very important for entrepreneurs and business owners, we would all be served well by having a well defined exit strategy. Similarly to your investment portfolio, an exit strategy needs to be recalibrated over time to make sure it serves you and not the other way around.

Every business goes through a life cycle. It may be a sudden chapter 11, the sale to a relative, wanting to buy something else, or a market opportunity to sell. It is a good idea to consider how your business (and skill) will be valuated, before you get to that bridge and need to cross it.

Business owners and entrepreneurs often risk placing an unrealistic value on the "good will" component of their organization. What are realistic market valuations of businesses? A couple of years ago, our professional network asked that question to Richard Ward, of the middle market investment banking firm Everingham & Kerr, Inc. and got an education. Here's what we found out.

Where the value is

A normal growth per year hovers around 3-4%. And owners of mid-sized companies often have no idea of the value of their business. Many of the companies E&K works with started probably as businesses with a turnover of $200k or $300k and are now making $2.5MM a year.

Most founders are pretty poor at selling and marketing their businesses -- they are the specialists: engineers, scientists, and operational people. For example, a business that earns $2-3MM per year may have the growth potential opportunity/value to $10MM but the owner takes home $750k and does not care. There is tremendous opportunity for a marketing specialist to help you build more equity in your business, yet, as Mr. Ward stated, most business owners are quite happy with status quo.

Another example is the value of a company's customer base. E&K may talk to an owner that will be able to sell the customer portfolio for $2.7MM, stay on to help with transition for a hefty salary and, on top of that, lease the building he owns to the new owners of the business.

What is an Exit Strategy?

Having an exit strategy is about increasing the value of a business, not about the things you've always done and been successful at. What are the things you can do to make a business stronger?

Every situation is different. Take for example a company's culture. It may seem a soft issue. Yet, it is a huge determining factor in buying and selling a company. The deal goes through if the buyer and seller like each other -- and that includes the employees. In most cases the owner stays on for a transitional period of time to run the business.

This is true even of larger companies. I've been in 4 corporate acquisitions to date (on the acquired side), and the companies that in my view realized the most value out of the deal have been those who set a specific transition process for knowledge and people. Never underestimate the value of people. A bunch of files, even when well kept, will never give you the same value as the experience and relationships of the people who got the company to where it was palatable to buy.

A case study

Comparing two companies that on the surface look similar:

• Company A -- Company L
• Current $4.0 -- $4.0 [revenues in millions]
• 2001 $4.7 -- $3.6 [revenues in millions]
• Loans ($1.7)-- (750k) [liabilities]
• Capital 0 -- (1.0) [expenditures needed*]
• Owner 1/2/3-yrs -- 3/cash [terms of sale in millions]

* purchase price = what you pay and what you have to spend

In the past, banks would lend against cash flow. Today you leverage against assets (equipment, for example). Plus there needs to be a personal guarantee (collateral). Many companies to not have many assets (consultancies, for example) so you put more up or the seller takes on more risk. For a good company you'd put down 20%, finance 60% and the owner holds the remaining 20% back, usually for three years.

Everingham & Kerr deals with mid-sized companies, but 80% of the deals that are done in today's market are worth less than $1MM.

What are the Steps?

1. A buyer LOI (letter of intent)
2. Due diligence (up to 90 days)
3. Purchase agreement (lawyers, bankers and accountants get involved -- the accountants for the buyer are easy to work with; the ones for the seller don't want to lose the account)

Situations happen at any time during the process. For example, someone may die in a car accident. Investment banks work in different ways, so make sure you ask yours. Everigham & Kerr takes a $15k retainer that gets applied against the success fee at the end.

Regulatory Environment

There is a moral problem inherent with dealing with people's largest assets -- their business. Mr. Ward is President of the PA Business Brokers Association and is working with State Senator Stuart Greenleaf to regulate business brokers. There have been many scams wrought in by unscrupulous companies that give seminars for $20-25k, give you a nice looking binder and then nothing comes of it.

There is an opportunity to write legislation that will protect businesses in their most vulnerable times: when they are thinking of selling. The International Business Brokers Association requires a license to do business.

How do you go about it?

Figure out what your future is and develop a transition plan. It's not about revenue, it's about value. Review your exit strategy with a professional. Look at fixed costs vs. revenue stream, for example and where your opportunity to increase the margin is.

The planning stage should be 2-5 years out. The market price is the amount of risk the buyer has to take on. For the seller it's the future -- when is enough, enough?

Time is an enemy when closing the deal so make sure that your communications are frequent and well articulated. And remember: "Goodwill" should be just for old clothes.

If you are not using the 80/20 Principle to control your strategy, your strategy is more than likely wrong. You may not have an accurate picture of where you make, and lose, the most money.

Where are you making the most money?

Conduct an 80/20 Analysis of profits by different categories of your business:

by product or product group/type
by customer or customer group/type
by any other split which appears to be relevant for your business
by competitive segment

Look at the sales over a given period and then determine the profit of each after allocating all of the cost for each group/type. Be careful when allocating the cost as each product will be different and have more or less activity from sales, manufacturing, etc.

When correctly allocating the cost to each product, you will usually find that some are making most of the profit and some are accounting for most of the losses, with the rest falling somewhere in between.

After products, go on to look at each customer, some will be willing to pay more but require a higher cost to service. Follow the same analysis for the remaining group/types that you have identified.

Now with all the information at hand divide your business up into segments and what products they use and determine the return on sales for each. Find the closest top 20% and the closest bottom 20%.

What actions should you take on this Analysis?

Before you take any action, know what the results will be. Will reducing the resources for one segment have any affect on another segment that is showing a profit? Discuss the changes with all departments to be sure that everyone is on board and that you have not overlooked anything. If a segment is losing money but improving you may want to give it time before shifting resources to a more profitable segment List each segment and assign a priority, describe the characteristic and the proposed actions for each segment.

Your goal should be to start with an 80/20 profit analysis and determine a segment strategy. Continue to refine your results and redirect your efforts to the areas where you can gain the most benefit. There will always be an 80/20 relationship between the group/types in your business, and there will always be room for improvement. The work will never be complete.

Sugested reading: The 80/20 Principle, by Richard Koch, ISBN 0-385-49174-3

Think of an example from your business where the 80/20 Analysis might result in strategy for improvement in profits.

About the Author: Hubert Crowell, Cave Explorer

After working in service for 23 years with Eastman Kodak Company as a service person, technical support and training specialist, followed by another 13 years working for other companies in the service field, I have decided to share my ideals on improving the service department. I would like to thank Jack Ingram, my supervisor at Eastman Kodak Company for the encouragement and guidance until his retirement. I would also like to thank Barco Projection Systems and all the great employees that worked with me for the last seven years before I retired.

For complete paper on The Service Department, Please visit my web site at: http://hucosystems.com/

I have started writing as a hobby and plan to write about my life, work, hobbies, religion and many other things of interest to me and maybe others will enjoy also.

For a complete viewing of my articles with photos please visit my article web page at:

http://hubertcrowell.name/

By Pam

By Todd Anthony

When it comes to doctors and lawyers, experience is usually a plus. Then again, a lot of the older professionals I have visited are woefully out of touch. In a couple of cases this has turned out bad for me.

In the advertising world, I have seen few jobs where having experience is really important. Pharmaceutical experience, interactive experience, package writing experience...come on. I've seen job descriptions where the knowledge that was being required would take literally one hour to figure out and less than a day to master.

When will companies figure out how to assess a candidate's ability to problem solve and learn rather than always requiring them to have done everything before? When you only hire people with a narrow set of experience you create an environment where everyone thinks alike, nobody questions, nothing changes, and everything gets stale. Your company NEEDS fresh blood or it will die.

Experience is bunk. It's thinking that makes the difference.

By Anita Campbell on Startup Trends

Three more businesses are now featured in the Spotlight section of the JumpUp.com community website.

I want to point them out to you, because each overcame a business challenge similar to one you may be facing: how do you attract new customers?

Read their stories:

• Integra Global Solutions, an outsourced bookkeeping service, is headquartered in Pittsburgh, Pennsylvania, with offices in the U.K. and India. Ganesh Ranganathan, the owner, faced a challenge that millions of small business owners face: how to improve in the search rankings and get traffic to his website. His solution? He taught himself about search engine optimization and search engine marketing, and put that knowledge to work. “Ganesh started by taking a class and attending SEO forums to learn the vocabulary of SEO terms and understand the methods for improving his results.” View the Integra Global Solutions Spotlight.

• Construction Deal, Inc., a matchmaker for contractors and construction projects based in Sherman Oaks, California, also faced the challenge of getting traffic to its website. The approach of Tim Clark, the owner, focused on building strategic partnerships and link relationships with partners serving a similar target audience. “… [H]is big win was recognizing the value of building links to and from his site with adjacent businesses also focusing on remodel and repair opportunities.” Take a look at the Construction Deal Spotlight.

• Gina’s Tax Service, of Bullard, Texas, faced a similar challenge: getting new customers. Gina Gwozdz, CPA turned to the Web, set up a free Blogger blog, and managed to draw on new clients from outside her small town. “Gina’s blog now attracts readers from all over the country which has translated into a 30 percent increase in clients.” View the Gina’s Tax Service Spotlight. And visit Gina’s Tax Blog, too.

Back in October and November 2006, the JumpUp.com site put out a call for entries to tell your story and be profiled in a New Business Spotlight. Ganesh, Tim and Gina all applied via Small Business Trends, and I assisted Intuit in judging the entries.

I was struck by the fact that each of these business owners faced challenges that were not exotic or all that unusual. Rather, they boil down to a single issue that I know business owners everywhere have to deal with all the time: how do you attract more customers? For that reason, I felt the experiences of Ganesh, Tim and Gina would be inspiring.

While you are over at the JumpUp.com site, take a look at the HUGE amount of Web real estate each of the Spotlighted businesses gets — each Spotlight must take up half of the JumpUp.com home page. That’s the way to do it, Intuit.

Discovered at Duct Tape Marketing:

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Offering free stuff as a marketing tactic is an accepted practice in most industries.

However, in most cases, the party offering the free information or bait is actually interested in charging for it. Even if that charge is the exchange of a name and email address. So, for some, free isn't free and may be too expensive. Take the "free" evaluation. Free in this case might mean that the recipient must take time, accept an appointment and sit through veiled sales presentation. Free is one of the most powerful marketing words on the planet but, what makes free really free is trust. In order to use this tactic effectively the recipient must trust that you won't abuse their permission. If you have no previous relationship with a prospect you cannot go overboard assuring them that you won't misuse their information. You must actively sell your free information by communicating just how valuable it really is.

Taking steps to build trust with testimonials and referrals, providing great free information with no strings attached and being consistent is how you lower the barrier to free. Once this is done effectively, and you haven't abused the trust you've earned, you can move to steps that provide greater education and demand greater involvement.

In fact, now your free information might actually be something they would pay for.

Pundits love to talk about market share and often assume that Yahoo is targeting Google and vice versa, but that strategy never works. A paper by Wharton marketing professor J. Scott Armstrong shows that focuses on competitors instead of profits is a losing proposition. The paper "Competitor-oriented Objectives: The Myth of Market Share" provide real world and laboratory data proving that market share should not be a company goal.

Companies that established objects aimed at stealing market share actual hurt profitability, according to the study.

"All of the correlations between competitor-oriented objectives and profits were negative, ranging from minus 0.28 to minus 0.73," the study says.

A recent example is Sony and Microsoft, which are going at each other in the console wars, while Nintendo has become the most profitable of the three.

This article is a good reminder that profitability, not bragging rights, is the endgame.

Posted By John Gartner at 06:34 PM

By Valeria Maltoni (at Conversation Agent)

And it's not about the marketing spend. You have seen it in the news and if you managed to miss that, there have been some notable discussions about it in the conversations we've had in my neighborhood of the business blogosphere: AT&T announced that it will fold the Cingular brand into it's own. Get over it, says Todd Wasserman in a recent article on BrandWeek, after all the Cingular brand didn't stand for much.

I beg to differ: it did stand for something, which went well beyond the sentimentality of marketers -- it would be worse to call it the sentimentality of people, wouldn't it? As I outline in my weekly FC Expert Blogs post, the Cingular name and brand stood for an experience and a real customer conversation, and that was notable.

Stephen Denny, a veteran at connecting brands to the wants and needs of technology users, was the first one to comment on Brand Equity in his Note to CMO on January 13 --

Here's a guess on my part, and I'm willing to debate this, but I seriously doubt that the mobile phone users of the world all see AT&T as a brand they'd flock to; AT&T is a dinosaur of a brand image. It's like GM without the sexiness. That was a joke, by the way.

Brand awareness and brand equity are not the same thing. I can't believe AT&T is a brand your mobile phone core user would aspire to. This is a strange decision.

Matt Dickman, a technology strategist at interactive marketer DigiKnow, gave as a preview in Steven Colbert shows the confusion surrounding Cingular's name change in his Techno//Marketer on January 19 --

I am sure Cingular subscribers are just as confused. We'll see how this pans out for them. The iPhone launch may be the only thing keeping people as a customer here.

I know that AT&T...sorry...at&t wants to re-assert itself as a communications powerhouse, but Cingular was a well established brand that stood (in my opinion) for the opposite of everything at&t was and is again.

Marketer Mack Collier at The Viral Garden, the place beyond Madison Avenue where marketing ideas grow and spread, followed with his thoughts on AT&t Kills Cingular, Gives us your Grandfather's Cellphone on January 22 --

Cingular has brand equity. It is seen as young, hip, reliable. When you think of AT&T, you think of landlines, rotary dials, and the Reagan administration.

Is there ANYONE outside of the AT&T board room that would rather have the AT&T name on their cellphone than Cingular? I've been pretty satisfied with my Cingular service the past few years, but the first time I get a bill with the big bold blue AT&T logo on it, I'm going to start considering Verizon. It will be an involuntary reaction.

Did Steve Jobs know this was coming when he made Cingular the 'exclusive wireless provider' of the iPhone? Talk about a branding mismatch!

These are not the sentimental cries of people who fell in love with the idea of an orange Jack character, nor it is about the money. Branding a wireless service may be like branding utilities, yet Wasserman unwittingly makes my point: as a customer the most important factor for me is that the service works and that when it doesn't someone will make it happen for me. Cingular was better than some of the alternatives at that -- and I tested the company's limits on multiple occasions.

Price can be a factor when all things are equal. Somehow, some brands surprise us and manage to deliver above what expected. And that soft or intrinsic value is worth more than just a dismissive pat on the back, because today it's not business as usual. When companies manage to deliver on the people side in this day and age they stand quite apart from the pack. In that sense, they are singular.

Link: Love Thy Competitor at Presentation Zen

I have talked about the costs of Sarbanes-Oxley forcing companies to delist themselves and go dark. The disturbing part about that trend is that it undermines one of the great strengths of the markets in the US, Canada, Europe and Great Britain and Australia with the rise of the citizen investor.

It's the great democratisation of the market where more citizens are the collective owners of the big companies. When society at large has some skin in the game, the companies become more accountable to society. It's a point I examine here when I look at the trend of the "universal owner".

Now there are many more constituents and vested interests, and that changes the game completely.

Just ask the ousted chief executive of Home Depot Robert Nardelli, a point made in this piece by The Wall Street Journal's Alan Murray that we have here via the San Diego Daily Transcript.

The trend of so many companies going private therefore might not be in the public interest. It's a point examined by Chicago Tribune columnist Andrew Leckey . Leckey draws on the comments made by Robert Mittelstaedt, dean of the W.P. Carey School of Business who, it must be said, is no friend of Sarbanes-Oxley. Just read his comments in this piece.

Still, Mittelstaedt now says that public companies have brought jobs, retirement plans and good investment and that the practice of private equity outfits to saddle the companies up with debt, and then unload it later might not be in the public interest.

More importantly, it undermines the way citizen investors are reshaping corporations and making them more accountable. It's a trend examined by Stephen Davis, Jon Lukomnik, David Pitt-Watson in their new book The New Capitalists, and summed up in their piece The Capitalist Manifesto: Managing the Rise of Citizen Investors.

The citizen investor, they argue, has laid down 10 commandments for delivering value:

1. Be profitable - create value.

2. Only grow when you can create value.

3. Pay people fairly to do the right thing.

4. Do not waste capital.

5. Focus where your skills are strongest.

6.Renew the organisation.

7. Treat customers, suppliers, workers and communities fairly.

8. Seek regulations which ensure your operations do not cause collateral damage and your competitors do not gain unfair advantage.
9.Stay clear of partisan politics.

10. Communicate what you are doing and be accountable for it.

Any trend that undermines these forces has to be watched carefully. That's in the public interest.

By GuyKawasaki

Before you dedicate your life to crafting a business plan the length of a book, read these two paragraphs from the 1/9/07 edition of the Wall Street Journal in an article called "Enterprise: Do Start-ups Really Need Formal Business Plans"

A study recently released by Babson College analyzed 116 businesses started by alumni who graduated between 1985 and 2003. Comparing success measures such as annual revenue, employee numbers and net income, the study found no statistical difference in success between those businesses started with formal written plans and those without them...

“What we really don’t want to do is literally spend a year or more essentially writing a business plan without knowing we have actual customers,” says William Bygrave, an entrepreneurship professor at Babson College in Wellesley, Mass., who says he generally advocates “just do it.” Entrepreneurs must be nimble, and will be more apt to stick with a flawed concept they spent months drafting, he adds.

I think that Prof. Musgrave’s study is so right. Here is the entire study if you’d like to read it. This is the plan’s abstract:

This study examined whether writing a business plan before launching a new venture affects the subsequent performance of the venture. The data set comprised new ventures started by Babson College alums who graduated between 1985 and 2003. The analysis revealed that there was no difference between the performance of new businesses launched with or without written business plans. The findings suggest that unless a would-be entrepreneur needs to raise substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business.

The phrase “unless a would-be entrepreneur needs to raise substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan” merits discussion. Most venture capitalists require a business plan as part of due diligence. This doesn’t mean they spend more than ten minutes reading the plan, and it certainly doesn’t mean that they believe it. :-) A great plan won’t make a lousy idea successful, and a lousy plan won’t necessarily stop a great idea.

Most of the plans that we see at Garage are too long and too detailed—to the point of reducing credibility. Here is my prior blog posting about business plans that you might find helpful. The gist of it is:

• Perfect your pitch, then write your plan.

• Use the business-plan exercise as a way to get your team on the same page.

• Keep it short: ten to twenty pages.

• Spend no more than two weeks writing it.

• Don’t get obsessed with with details in your financial forecast because it should be one page long.

However, don’t draw the wrong conclusion from this study: “Analysis, planning, vision, and communication are unnecessary.” This isn’t true. What is true is that a business plan should not take on a life of its own. It is a tool—one of many that may help you get funded (or, more accurately, hinder you from getting funded if you don’t have one) and may help you get your team working as a team. But it is not an end in itself.

Found on Duct Tape Marketing:

In an article published in the January issue of Investment Advisor magazine several points in an article called Stepping Up - How the best advisors take their firms to the next level jumped off the page.

Compared to the market as a whole, firms that dominated their market:

• Are 60% more likely to have annual sales goals


• Are twice as likely to use business development specialists


• Are 30% more likely to proactively seek referrals


• Secure one-third more clients through strategic partners


• Are three times more likely to have formal agreements with referral partners

Are you doing all of these - any of these?

From Wired: How Yahoo Blew It.

Talks about how Yahoo! offered to buy Google in 2002 and how things have changed since.

If you regularly read this blog, you know I have Semel as one of the Five CEOs that Must Go so this merely adds fuel to that fire. I still believe he's made his money so it's time to move on and let someone else guide the ship that has the passion to grow the company innovatively.

>In looking over the infamous group from that posting back in October of last year, #1 has been dethroned (Bob Nardelli formerly of Home Depot). How long until another one falls?

>Speaking of CEOs falling, George Shaeffer, Jr. of Fifth Third announced yesterday he was stepping down in April and Kevin Kabat will take over the reigns. This has been a long time coming, and George has caught ten tons of heat the past few years. I didn't include him in the list back in October because he actually did a solid job in his 16 years at the helm--Fifth Third just didn't continue to grow at the pace of some of their competitors in recent years. I believe they were more calculated in their moves, and that's not always a bad thing.