“Once a new technology rolls over you, if you're not part of the steamroller, you're part of the road.” ~Stewart Brand
A recent survey showed that the average person spends 12 to 15 hours each week on the web. During this time, they will visit more than 25 websites and spend a chunk of it on Facebook.
So much of what drives a purchasing decision on the web is what people read about a product or service from other consumers. If I read a bad review about a hotel that I was considering, clearly, I will not stay there. On the other hand, if I see great reviews about a new tech gadget, I will seriously consider purchasing it.
The more you know about what your customers are reading and what is influencing their decisions, the greater your success. This was not possible in the past. Now, however, new web-scraping software mines data on the web, automatically extracting valuable information for analysis.
One of the leaders in this field is Mozenda, which offers a neat web-scraping product at very reasonable prices. Rates start at $99 to scrape 5,000 pages or images of websites a month. There are also free web scraping programs at www.freedownloadmanager.org/downloads/web_scraping_software/.
Businesses can use this software to monitor blogs, chat rooms and social networking sites to keep tabs on what people are saying about their products. With this technology, so much more information can be learned before a problem develops, enabling a more timely response.
If Apple had been monitoring blogs, it would have known the extent of the iPhone 4's problems (dropped calls) and seen how dissatisfaction was escalating. The company could have responded more quickly to the growing negative remarks.
There is an overabundance of information available online. With astronomical amounts of data swirling around out there, shoppers rely more and more on the information provided by other consumers to make decisions. Knowing this, many firms let customers comment on their products and services right there on their websites.
Take QVC and HSN, for example. On their sites, consumers can comment on each item sold. When a product does incredibly well in consumer input, they frequently mention this on the air.
Web scraping analysis should be part of each firm's marketing budget because it will become an even more dominant marketing tool. Now go out and see if you can apply web-scraping software to your business in a cost-effective way.
You can do this!
Sunday, January 30, 2011
Sunday, January 23, 2011
Start Your Business on a Sound Footing
“Growth for the sake of growth is the ideology of the cancer cell.” ~Edward Abbey
The normal way to expand your business, especially in retail, is to expand the number of physical locations. If you are making money at one location, then adding another location normally increases the total profits of the company. However, this is not always the case.
We've been assisting a small auto repair business that had been in business for about 3 years. However, for this entire time period, the business has never been profitable for numerous reasons, including an absentee owner, not marketing very well, and not having any real processes in place to manage the company.
Additionally, with these losses the cash-flow of the business was very sparse, forcing the owner to watch every cent, to defer paying many creditors, and put all of his savings into the business.
The owner thought that the only way that he could make it financially was by finding a new location and working at it full time. He figured it would subsidize the older shop that was losing so much money. He was able to get the new location without any down payment and was able to finance the small inventory he needed to keep on hand.
For about six months, he worked hard to get the new shop up and running while the old location hemorrhaged more and more cash. He tried to reduce prices to bring in new business at both locations, but this didn't work, nor did just about anything else he tried.
Where before he was losing money from just one location, now he was hemorrhaging even more cash from two.
When we started to work with him, he just could not get any focus at all because he felt totally out of control. It was hard for him to concentrate and he was becoming very irritable towards his employees as well. We tried to encourage him to close one business but he couldn't because he had signed long-term leases for both locations.
In addition, he felt like he would be a failure if he closed the business that he had been dreaming about owning for so long.
Finally, he had no other choice but to file bankruptcy to get out of the mess he had created. When I asked him what he had learned from this experience, he said that he should have never opened the second location, and that he should have concentrated on the first one to make sure it was both profitable and running smoothly before he expanded.
Expanding - while feeling good - is fraught with difficulties. Now go out and make sure that before you expand your business, that you are running a very efficient and profitable enterprise.
You can do this!
The normal way to expand your business, especially in retail, is to expand the number of physical locations. If you are making money at one location, then adding another location normally increases the total profits of the company. However, this is not always the case.
We've been assisting a small auto repair business that had been in business for about 3 years. However, for this entire time period, the business has never been profitable for numerous reasons, including an absentee owner, not marketing very well, and not having any real processes in place to manage the company.
Additionally, with these losses the cash-flow of the business was very sparse, forcing the owner to watch every cent, to defer paying many creditors, and put all of his savings into the business.
The owner thought that the only way that he could make it financially was by finding a new location and working at it full time. He figured it would subsidize the older shop that was losing so much money. He was able to get the new location without any down payment and was able to finance the small inventory he needed to keep on hand.
For about six months, he worked hard to get the new shop up and running while the old location hemorrhaged more and more cash. He tried to reduce prices to bring in new business at both locations, but this didn't work, nor did just about anything else he tried.
Where before he was losing money from just one location, now he was hemorrhaging even more cash from two.
When we started to work with him, he just could not get any focus at all because he felt totally out of control. It was hard for him to concentrate and he was becoming very irritable towards his employees as well. We tried to encourage him to close one business but he couldn't because he had signed long-term leases for both locations.
In addition, he felt like he would be a failure if he closed the business that he had been dreaming about owning for so long.
Finally, he had no other choice but to file bankruptcy to get out of the mess he had created. When I asked him what he had learned from this experience, he said that he should have never opened the second location, and that he should have concentrated on the first one to make sure it was both profitable and running smoothly before he expanded.
Expanding - while feeling good - is fraught with difficulties. Now go out and make sure that before you expand your business, that you are running a very efficient and profitable enterprise.
You can do this!
Sunday, January 16, 2011
Having Tim Management Goals
“All time management begins with planning.” ~Tom Greening
If there is a single complaint that I hear more often than any other from entrepreneurs, it is that they lack the time to do the work required to keep the business successful.
Time is the most critical resource each of us has, and we will never get another chance to live this moment, this hour or this day. As I have gotten older, I have come to realize that using time effectively is the key to success, both as a leader and as a human being.
There is no denying that running a business or managing a department is tough, but using effective time management techniques can free up so much of your time.
If you are concerned about how well you are managing your time, record a time log for three days. For every 15-minute increment, write down what you accomplished, whether or not the time was well spent, how it could have been more effectively utilized and how you felt during this time. A time log is an important place to start since it is impossible to change how you manage your time if you do not know where you have been. Throughout this process, try not to judge yourself. Instead, think of your time log as a basis for improvement.
As with most habits, changing how you manage your time takes practice, and setting goals is critical to this process. Too often, people say they want to improve their time management but try to do so without any goals to guide them. One such goal might be to have two hours of uninterrupted time each day to focus on tasks that are both important and urgent. Another goal might be to delegate specific tasks to a subordinate by a certain date. A third might be to work no more than 10 hours a day.
Where improving time management is concerned, it works best if you first understand where the problem areas are. Next, you will need to set some goals to improve those areas and make a plan with monthly benchmarks to guide you as you work toward achieving each goal. A goal without a plan just is not going to work.
Since adhering to plans by yourself is tough, work with a fellow colleague, family member or friend who can help you monitor your accomplishments on a monthly basis. This provides the system of checks and balances that most people really need to stay on track. Being held accountable is so important to achieving your time management goals.
Now go out, make a time log, and take a moment to evaluate where you are in terms of current skills and overall effectiveness. Set some goals and find someone who can hold you accountable to these goals. More effective time management will make you a better leader and a more complete person.
You can do this!
If there is a single complaint that I hear more often than any other from entrepreneurs, it is that they lack the time to do the work required to keep the business successful.
Time is the most critical resource each of us has, and we will never get another chance to live this moment, this hour or this day. As I have gotten older, I have come to realize that using time effectively is the key to success, both as a leader and as a human being.
There is no denying that running a business or managing a department is tough, but using effective time management techniques can free up so much of your time.
If you are concerned about how well you are managing your time, record a time log for three days. For every 15-minute increment, write down what you accomplished, whether or not the time was well spent, how it could have been more effectively utilized and how you felt during this time. A time log is an important place to start since it is impossible to change how you manage your time if you do not know where you have been. Throughout this process, try not to judge yourself. Instead, think of your time log as a basis for improvement.
As with most habits, changing how you manage your time takes practice, and setting goals is critical to this process. Too often, people say they want to improve their time management but try to do so without any goals to guide them. One such goal might be to have two hours of uninterrupted time each day to focus on tasks that are both important and urgent. Another goal might be to delegate specific tasks to a subordinate by a certain date. A third might be to work no more than 10 hours a day.
Where improving time management is concerned, it works best if you first understand where the problem areas are. Next, you will need to set some goals to improve those areas and make a plan with monthly benchmarks to guide you as you work toward achieving each goal. A goal without a plan just is not going to work.
Since adhering to plans by yourself is tough, work with a fellow colleague, family member or friend who can help you monitor your accomplishments on a monthly basis. This provides the system of checks and balances that most people really need to stay on track. Being held accountable is so important to achieving your time management goals.
Now go out, make a time log, and take a moment to evaluate where you are in terms of current skills and overall effectiveness. Set some goals and find someone who can hold you accountable to these goals. More effective time management will make you a better leader and a more complete person.
You can do this!
Sunday, January 9, 2011
Mistakes in Running a Business
"There are no mistakes, no coincidences. All events are blessings given to us to learn from." ~Elizabeth Kubler-Ross
As I go around and talk to entrepreneurs, one of the most common statements that I hear is, "It was a mistake when I did--- ." Somehow, we all feel as if we should have been wise enough to avoid making mistakes. I am here to say that this is a false notion. Mistakes are part of life and perfection is just not achievable. I have never met a perfect entrepreneur nor will there ever be one.
Mistakes are just going to happen, period! If you go back and think about how you define mistakes it is with hindsight that you wish you had made another decision. However, at the time you made your original decision, you really made the best decision you could have with the knowledge and facts that you had on hand at that moment.
While mistakes are going to happen, I encourage you not to beat yourself up about these. So many folks just keep whipping themselves over and over for the "poor" decisions they have made. Has this whipping ever made you feel better? It has never helped me! Rather than beating yourself up, use the quote above by Elizabeth Kubler-Ross to find out what you can learn from this experience. For example, if you find that you believe that workers have been taking advantage of you because you have been too nice or too giving, ask yourself what you can learn from this experience. Some things of value that may be learned here include:
It is okay to say "no" to associates,
I do not need my associates to like me,
or I need to be firmer.
Mistakes are a way to grow. As we learn what works and what does not work, we learn how to adapt and prosper. Now I am not advocating for you to go out and deliberately make mistakes, rather I am suggesting that mistakes aid you in becoming a better entrepreneur. If you ask the most prosperous entrepreneurs where they learned the most, without hesitation, they will always respond: "from their mistakes."
Obviously, if you are at a critical juncture with your business, then you need to insure that, if a bad decision is made, it will have the smallest impact possible. Reducing the risk or cost of making a mistake, really helps you to make better decisions for your business. One great way to help in this process is to talk to as many people as possible about this decision. These people should be knowledgeable in the area of your concern.
The type of mistakes that you really do need to examine very carefully are the ones that you repeat over and over. If you find that you are making the same mistake, then you are not learning what you need to learn from this experience. I think a great concept is that "we want to make new mistakes and not repeat old mistakes."
Mistakes are a fact of life and are inescapable. We must carefully examine our mistakes and learn something from each of them if we are going to prosper from the learning experiences presented to us.
As I go around and talk to entrepreneurs, one of the most common statements that I hear is, "It was a mistake when I did--- ." Somehow, we all feel as if we should have been wise enough to avoid making mistakes. I am here to say that this is a false notion. Mistakes are part of life and perfection is just not achievable. I have never met a perfect entrepreneur nor will there ever be one.
Mistakes are just going to happen, period! If you go back and think about how you define mistakes it is with hindsight that you wish you had made another decision. However, at the time you made your original decision, you really made the best decision you could have with the knowledge and facts that you had on hand at that moment.
While mistakes are going to happen, I encourage you not to beat yourself up about these. So many folks just keep whipping themselves over and over for the "poor" decisions they have made. Has this whipping ever made you feel better? It has never helped me! Rather than beating yourself up, use the quote above by Elizabeth Kubler-Ross to find out what you can learn from this experience. For example, if you find that you believe that workers have been taking advantage of you because you have been too nice or too giving, ask yourself what you can learn from this experience. Some things of value that may be learned here include:
It is okay to say "no" to associates,
I do not need my associates to like me,
or I need to be firmer.
Mistakes are a way to grow. As we learn what works and what does not work, we learn how to adapt and prosper. Now I am not advocating for you to go out and deliberately make mistakes, rather I am suggesting that mistakes aid you in becoming a better entrepreneur. If you ask the most prosperous entrepreneurs where they learned the most, without hesitation, they will always respond: "from their mistakes."
Obviously, if you are at a critical juncture with your business, then you need to insure that, if a bad decision is made, it will have the smallest impact possible. Reducing the risk or cost of making a mistake, really helps you to make better decisions for your business. One great way to help in this process is to talk to as many people as possible about this decision. These people should be knowledgeable in the area of your concern.
The type of mistakes that you really do need to examine very carefully are the ones that you repeat over and over. If you find that you are making the same mistake, then you are not learning what you need to learn from this experience. I think a great concept is that "we want to make new mistakes and not repeat old mistakes."
Mistakes are a fact of life and are inescapable. We must carefully examine our mistakes and learn something from each of them if we are going to prosper from the learning experiences presented to us.
Sunday, January 2, 2011
Be Careful When Starting A New Business!
"You don't know until you know how much you don't know.” ~Anonymous
Starting a business is hard, but many people believe that if you have the passion and energy, you can be successful. This however, is just not the case. Before you step up to run a business, you must have experience and knowledge.
A wonderful lady was referred to us for help with her new restaurant venture. She had worked as a nurse for over 20 years and was just worn out. Her hardworking son, who was a good cook and currently unemployed, would join her in the business. She really felt that this restaurant would provide the income she and her son needed.
After months of searching, she found a location she could afford. Though the rent was a perfect fit, there was no parking, the location was poor, the equipment was in need of repair and three other restaurants had already failed in that very same location. The owner of the property was aware of its shortcomings, which probably explains why he was willing to offer a year lease. A one-year lease is completely unheard of in the restaurant business.
My colleague, Barbara Lay, and I met with the hopeful restaurateur one morning over coffee. She was three days away from signing the lease on the property, and she was so excited about what she had convinced herself was the perfect location. You could just feel it as she told us about the building.
This woman was completely convinced that starting her own restaurant would solve so many of her problems. However, as we talked, we discovered that she had absolutely no experience with accounting, marketing or even setting up a menu.
She did not consider her lack of experience a problem. She thought she would pick things up quickly once she put in the requisite effort. She also said that, like her son, she loved to cook, and she had waited tables in college.
Though her can-do attitude was admirable, we had to caution her against moving forward without experience. Being inexperienced in the business you are trying to start will frequently result in very expensive mistakes.
In response to these warnings, she kept insisting that she would learn as she went along. To prove my point, I asked her if she would let an untrained person perform nursing procedures. Of course the answer was no. This example seemed to resonate, and she understood my point.
Many of this woman’s friends had encouraged her to move forward with the venture. However, we advised her not to completely trust her friends’ opinions. Because they are her friends and they want to see her succeed, it would be very difficult for them to be completely honest with her. They were acting out of their desire to be supportive.
As we continued to gently prod her about her concept, some tears were shed, and we knew she felt that we were destroying her dream. However, we continually reassured her that we were not suggesting she abandon the restaurant idea altogether, merely that she postpone it long enough to acquire the necessary experience and knowledge. Once she had the tools she needed to succeed, she could move forward. We suggested that she take QuickBooks classes, a marketing course and start working in the industry.
This potential start-up turned out fine, but many other start-ups fail because the owner lacks the tools to successfully manage their new business.
Now go out and make sure you have the training you need to be successful before you start or buy a business.
You can do this!
Starting a business is hard, but many people believe that if you have the passion and energy, you can be successful. This however, is just not the case. Before you step up to run a business, you must have experience and knowledge.
A wonderful lady was referred to us for help with her new restaurant venture. She had worked as a nurse for over 20 years and was just worn out. Her hardworking son, who was a good cook and currently unemployed, would join her in the business. She really felt that this restaurant would provide the income she and her son needed.
After months of searching, she found a location she could afford. Though the rent was a perfect fit, there was no parking, the location was poor, the equipment was in need of repair and three other restaurants had already failed in that very same location. The owner of the property was aware of its shortcomings, which probably explains why he was willing to offer a year lease. A one-year lease is completely unheard of in the restaurant business.
My colleague, Barbara Lay, and I met with the hopeful restaurateur one morning over coffee. She was three days away from signing the lease on the property, and she was so excited about what she had convinced herself was the perfect location. You could just feel it as she told us about the building.
This woman was completely convinced that starting her own restaurant would solve so many of her problems. However, as we talked, we discovered that she had absolutely no experience with accounting, marketing or even setting up a menu.
She did not consider her lack of experience a problem. She thought she would pick things up quickly once she put in the requisite effort. She also said that, like her son, she loved to cook, and she had waited tables in college.
Though her can-do attitude was admirable, we had to caution her against moving forward without experience. Being inexperienced in the business you are trying to start will frequently result in very expensive mistakes.
In response to these warnings, she kept insisting that she would learn as she went along. To prove my point, I asked her if she would let an untrained person perform nursing procedures. Of course the answer was no. This example seemed to resonate, and she understood my point.
Many of this woman’s friends had encouraged her to move forward with the venture. However, we advised her not to completely trust her friends’ opinions. Because they are her friends and they want to see her succeed, it would be very difficult for them to be completely honest with her. They were acting out of their desire to be supportive.
As we continued to gently prod her about her concept, some tears were shed, and we knew she felt that we were destroying her dream. However, we continually reassured her that we were not suggesting she abandon the restaurant idea altogether, merely that she postpone it long enough to acquire the necessary experience and knowledge. Once she had the tools she needed to succeed, she could move forward. We suggested that she take QuickBooks classes, a marketing course and start working in the industry.
This potential start-up turned out fine, but many other start-ups fail because the owner lacks the tools to successfully manage their new business.
Now go out and make sure you have the training you need to be successful before you start or buy a business.
You can do this!
Resolutions for 2011
“It is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be. This, in turn, means that our statesmen, our businessmen, our every man must take on a science fictional way of thinking.” ~Isaac Asimov
As we move into a New Year, it is so important to take some time and think of what you can do to run your business better in this year as compared to last year. Maintaining the status quo is just not acceptable and setting reasonable goals for year 2011 are so, so important.
Obviously, in 2011, the economy is going to continue to improve and really hit its stride in the last quarter of the year or the beginning of 2012. With that, we should see a pick-up of both inflation and interest rates. Additionally, unemployment will continue to be a significant problem as the economy can only absorb so many jobs every month and it is going to take over 3 years to get this unemployment rate down.
Given those environmental factors, here are some goals or resolutions for you to consider and adopt for your business. First, a very important goal for this year has got to be increasing both gross profit margins and net profit margins. If your net profit margin last was 5% then set a reasonable goal this year of hitting 7%. You can easily reach a higher net profit margin my reducing costs by just 2% which is pretty easy to do. The net profit margin (NPM) is so influenced by the gross profit margin (GPM). In a like manner, if your gross profit margin has been 38% then shoot to increase this to 40%. The way you hit these higher margins is making sure that with every decision you make, you consider the impact of profitability. Over the last couple of years with our economy, most businesses just tried to survive but now you must focus hard on profits and profit improvement.
Another goal is to fire yourself on January 1st and evaluate what new skills and knowledge that you must have for 2011. Most entrepreneurs are constantly evaluating their staff and business but just do not take time to evaluate themselves as the leader. If you should feel that you are weak in finance, then take some courses and read some books in this area. However, the real point here is that you must take time at the beginning of this year and assess how effective you are. Sometimes the best way to do this is to hire an outside consultant to come in and do a formal evaluation of your skills. No one should ever think that they are good as they can be as this normally generates an attitude of complacency.
The final critical resolution and goal is to map out some personal goals for yourself apart from your business. For example it is so important that you take time to make sure that you are physically fit. Time spent on this allows you to be so much more effective in leading your business. Additionally, figure out what additional things that you need to do support your family with your time.
Now go out and set some goals to deal with increasing your profit margins, ascertain the additional training that you need and develop some personal goals for you and your family.
You can do this!!
As we move into a New Year, it is so important to take some time and think of what you can do to run your business better in this year as compared to last year. Maintaining the status quo is just not acceptable and setting reasonable goals for year 2011 are so, so important.
Obviously, in 2011, the economy is going to continue to improve and really hit its stride in the last quarter of the year or the beginning of 2012. With that, we should see a pick-up of both inflation and interest rates. Additionally, unemployment will continue to be a significant problem as the economy can only absorb so many jobs every month and it is going to take over 3 years to get this unemployment rate down.
Given those environmental factors, here are some goals or resolutions for you to consider and adopt for your business. First, a very important goal for this year has got to be increasing both gross profit margins and net profit margins. If your net profit margin last was 5% then set a reasonable goal this year of hitting 7%. You can easily reach a higher net profit margin my reducing costs by just 2% which is pretty easy to do. The net profit margin (NPM) is so influenced by the gross profit margin (GPM). In a like manner, if your gross profit margin has been 38% then shoot to increase this to 40%. The way you hit these higher margins is making sure that with every decision you make, you consider the impact of profitability. Over the last couple of years with our economy, most businesses just tried to survive but now you must focus hard on profits and profit improvement.
Another goal is to fire yourself on January 1st and evaluate what new skills and knowledge that you must have for 2011. Most entrepreneurs are constantly evaluating their staff and business but just do not take time to evaluate themselves as the leader. If you should feel that you are weak in finance, then take some courses and read some books in this area. However, the real point here is that you must take time at the beginning of this year and assess how effective you are. Sometimes the best way to do this is to hire an outside consultant to come in and do a formal evaluation of your skills. No one should ever think that they are good as they can be as this normally generates an attitude of complacency.
The final critical resolution and goal is to map out some personal goals for yourself apart from your business. For example it is so important that you take time to make sure that you are physically fit. Time spent on this allows you to be so much more effective in leading your business. Additionally, figure out what additional things that you need to do support your family with your time.
Now go out and set some goals to deal with increasing your profit margins, ascertain the additional training that you need and develop some personal goals for you and your family.
You can do this!!
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