"Football incorporates the two worst elements of American society: violence punctuated by committee meetings."~George Will
It is important to limit the amount of time you spend attending meetings. The most successful meetings are ones where you need to give or receive critical information or where face-to-face interaction is important. One entrepreneur whom we assist runs from one meeting to another and hardly has time to breathe. When asked the value of all these meetings, his eyes just roll. Here is a very hard-working entrepreneur who just has a case of "meeting mania." By meeting mania I mean a belief that one has to attend a series of never-ending and usually, very unproductive meetings.
Before you schedule a meeting, make sure that one is really needed. An update or status meeting can generally be done with email. A worthwhile meeting must have an interactive component; otherwise, an email or memo will suffice.
There are four rules for planning great meetings. First, insure that there is a great reason to have a meeting in the first place. Meetings have a way of defying death and, once started, are hard to extinguish. So if you must have a meeting, make sure there is a darn good reason for it. Do not have a meeting just to have a meeting.
The second rule is to insure that there is a detailed agenda. An agenda keeps you on task and makes clear what subjects will be covered. The agenda should be mailed to participants ahead of time and it should clearly state what the participants need to bring to the meeting. Too often I see folks show up for meetings expecting to be spoon-fed. It is much better to get people to do some homework on the agenda items before they come to the meeting. Preparation ahead of time goes a long way toward insuring an effective and efficient meeting where people feel they have accomplished something worthwhile.
Setting up time limits for the meeting is the third rule. State the starting and ending time for each meeting on the agenda and stick to those times. I always include the following meeting rule on the agenda: "The time available, however much there is, will be filled with discussion on the agenda". A one-hour meeting frequently is much more effective than a three-hour meeting as participants know they must get through in a timely fashion.
The final rule is to make sure that the person in charge of the meeting can keep the group on task and also has the skills needed to deal with the thorny interpersonal issues that arise. Frequently, when someone in a meeting feels threatened, he or she closes down. The meeting leader must be able to recognize this and tactfully bring this person back into the conversation.
Meetings can be major time wasters. Summarized are the four simple rules to help plan and conduct worthwhile meetings:
Have a good reason to schedule a meeting.
Make sure there is a well-defined agenda.
Set time limits for the meeting.
Select a leader who will keep the group on task and is sensitive to the needs of each member.
If you follow these rules, your meetings will be shorter, more valuable, and possibly more fun. You can overcome meeting mania and save a lot of time in the process.
You can do this!
Sunday, November 27, 2011
Sunday, November 20, 2011
Letting Staff Know Their Authority
"Every man should keep a fair-sized cemetery in which to bury the faults of his friends."~Henry Ward Beecher
One of the most important things for a decision maker is to know the limits of his or her authority. That is, when they have to come to you or their supervisor for approval before a final decision can be made—as with expenditures, staffing decisions or disciplinary actions, for example. Unless you clearly specify these limits, you can not expect them to know what they are.
Knowing how much authority they have to make decisions is critical to a manager’s ability to do their job efficiently. You just do not want your staff coming to you for permission on every decision. This is such a terrible waste of time for both you and the employee.
I was working with a very successful technology business and had been meeting with the managers to evaluate the effectiveness of the staff. During one of these discussions, a new senior manager started talking about the trouble he had been having with a problem employee.
When I asked the manager why he did not do anything about the employee, he said he just did not have the authority. As a side note, he also commented that he did not have the authority to make any decisions about spending money either. I asked him how he knew this and he said he was never told that he could make these or any other decisions.
As I probed further into the situation, the manager said he had never initiated a conversation about authority with the owner because he did not have the courage to broach the subject. He did say, though, that he hoped the owner would tell him soon what his decision parameters were.
I wish I could say this was an isolated example, but I see situations like these on a regular basis. In these cases, I believe the entrepreneurs or managers are hesitant to give their staff any authority because they do not know if they can trust them to make good decisions.
The problem with this mindset is that employees can be coached in their decision-making, but if they are never given the opportunity, they will never learn how to make good decisions. In the event a lower-level manager has been given decision-making authority, received coaching and you still can not trust their judgment, it may be time to consider that the employee is no longer serving the needs of the company.
Now go out and make sure your employees clearly understand the extent of their authority. The sooner you convey this information, the better. Obviously, these parameters will change as the employee becomes more experienced and proves again and again that you can trust their decisions.
You can do this!
One of the most important things for a decision maker is to know the limits of his or her authority. That is, when they have to come to you or their supervisor for approval before a final decision can be made—as with expenditures, staffing decisions or disciplinary actions, for example. Unless you clearly specify these limits, you can not expect them to know what they are.
Knowing how much authority they have to make decisions is critical to a manager’s ability to do their job efficiently. You just do not want your staff coming to you for permission on every decision. This is such a terrible waste of time for both you and the employee.
I was working with a very successful technology business and had been meeting with the managers to evaluate the effectiveness of the staff. During one of these discussions, a new senior manager started talking about the trouble he had been having with a problem employee.
When I asked the manager why he did not do anything about the employee, he said he just did not have the authority. As a side note, he also commented that he did not have the authority to make any decisions about spending money either. I asked him how he knew this and he said he was never told that he could make these or any other decisions.
As I probed further into the situation, the manager said he had never initiated a conversation about authority with the owner because he did not have the courage to broach the subject. He did say, though, that he hoped the owner would tell him soon what his decision parameters were.
I wish I could say this was an isolated example, but I see situations like these on a regular basis. In these cases, I believe the entrepreneurs or managers are hesitant to give their staff any authority because they do not know if they can trust them to make good decisions.
The problem with this mindset is that employees can be coached in their decision-making, but if they are never given the opportunity, they will never learn how to make good decisions. In the event a lower-level manager has been given decision-making authority, received coaching and you still can not trust their judgment, it may be time to consider that the employee is no longer serving the needs of the company.
Now go out and make sure your employees clearly understand the extent of their authority. The sooner you convey this information, the better. Obviously, these parameters will change as the employee becomes more experienced and proves again and again that you can trust their decisions.
You can do this!
Sunday, November 13, 2011
Sell Value Not Cost
"Customer needs have an unsettling way of not staying satisfied for very long."~Karl Albrecht
There is no question that sales are the heart and soul of a business. This is not to say that you should ignore profits, which are absolutely essential, but you will not have profits unless you produce revenue.
Part of my job is to refer clients of ours to other businesses that may be able to help them. We do not receive any commission or benefit for making the referral other than the knowledge that doing so will likely help both businesses.
Several clients were in need of web services, and I had worked previously with a very savvy web designer. He has many years experience in the business and is especially skilled at search engine optimization. The prices he charges are also very reasonable, so I thought he would be great for these clients.
I made the referrals, and in each case, the web designer prepared an estimate complete with a portfolio of his past work. After some time though, he had not heard back from any of them. With his blessing, I wrote a few of these potential customers to find out why they had not followed up with him.
When I heard back, every one of them said that they could not afford his services, though none of them said specifically that he was too expensive. They all said his quality was great and his fees were very reasonable but that they could not afford what he was offering.
After we had a chance to go through these responses, the reason he had not gotten any of these jobs became clear. He was only selling the cost, not the value or the benefits of his services. The customers were seeing his services only as a cost that offered very little improvement over what they already had.
The web designer had incorrectly assumed that potential customers already recognize the value of an improved website. We are now working with him to help develop a pitch that showcases this value. Instead of highlighting costs, his new sales approach will focus on the benefits of a new website to the customer’s business, including improved sales.
Now go out and make sure all your sales materials highlight the value your product or service brings. You can do this a number of ways. The key is conveying that value clearly and succinctly. One possibility is to quantify for the customer how your product or service can improve their bottom line. If it helps them increase sales by 1 percent, for example, that is so many more dollars going to their bottom line that will reduce the cost. Additionally, sometimes you can clearly show that by spending this money on a project you will incur significant cost savings. The point is that you must communicate value not costs.
You can do this.
There is no question that sales are the heart and soul of a business. This is not to say that you should ignore profits, which are absolutely essential, but you will not have profits unless you produce revenue.
Part of my job is to refer clients of ours to other businesses that may be able to help them. We do not receive any commission or benefit for making the referral other than the knowledge that doing so will likely help both businesses.
Several clients were in need of web services, and I had worked previously with a very savvy web designer. He has many years experience in the business and is especially skilled at search engine optimization. The prices he charges are also very reasonable, so I thought he would be great for these clients.
I made the referrals, and in each case, the web designer prepared an estimate complete with a portfolio of his past work. After some time though, he had not heard back from any of them. With his blessing, I wrote a few of these potential customers to find out why they had not followed up with him.
When I heard back, every one of them said that they could not afford his services, though none of them said specifically that he was too expensive. They all said his quality was great and his fees were very reasonable but that they could not afford what he was offering.
After we had a chance to go through these responses, the reason he had not gotten any of these jobs became clear. He was only selling the cost, not the value or the benefits of his services. The customers were seeing his services only as a cost that offered very little improvement over what they already had.
The web designer had incorrectly assumed that potential customers already recognize the value of an improved website. We are now working with him to help develop a pitch that showcases this value. Instead of highlighting costs, his new sales approach will focus on the benefits of a new website to the customer’s business, including improved sales.
Now go out and make sure all your sales materials highlight the value your product or service brings. You can do this a number of ways. The key is conveying that value clearly and succinctly. One possibility is to quantify for the customer how your product or service can improve their bottom line. If it helps them increase sales by 1 percent, for example, that is so many more dollars going to their bottom line that will reduce the cost. Additionally, sometimes you can clearly show that by spending this money on a project you will incur significant cost savings. The point is that you must communicate value not costs.
You can do this.
Sunday, November 6, 2011
Crisis in Employment is Coming
"Treat employees like partners, and they act like partners."~Fred A. Allen
Eventually we will emerge from this sluggish economy, I promise. We will see growth again, and when the economy does begin to turn around, retaining your workforce will become absolutely vital to your business. According to MetLife’s recent study of employee benefit trends, businesses need to return to a focus on employee satisfaction.
When the economy slipped into recession, many workers were laid off, and those that remained were left to pick up the slack. While corporate profits have soared, employee satisfaction has tanked as workloads increased and morale plummeted. The MetLife study revealed that 33 percent of the workers surveyed expected to have a new job in the next 12 months. It seems these workers would have left right then if they could have, but they stayed put only because they knew there were very few jobs out there.
The MetLife study also revealed that, in 2010, the percentage of employees who said they felt loyal to the company was 44 percent as compared to 62 percent in 2008. Despite the dramatic decline, employers have not seemed to recognize this change. The study showed that 54 percent of employers believe their employees feel a strong sense of loyalty. Even more concerning is that only 22 percent of these employers said employee retention was their number one priority.
Turnover is costly and the loss of employees is going to be a severe problem, but employers who start taking steps now can minimize turnover and its damaging effects. First and foremost, employers must make employee retention a high priority for the company. Profits are super, but your staff is your lifeblood and you need to hold on to them.
Second, an employee morale survey can provide great insight into how you can help improve job satisfaction. The key here is that the survey should be conducted by a neutral, outside party. The staff will feel more comfortable responding this way, and you will get honest answers, which of course, is the outcome you want.
A third step would be to use your survey results to develop a plan for improving employee moral in the coming year. Using the survey results, you can establish a benchmark for measuring improvement over time. Benchmarks can also help you determine how much effort you will need to commit in order to reach the desired amount of improvement.
An employee appreciation program makes a great addition to your plan for improving morale, and it is easy to implement. Basically, managers should just go out of their way to show their appreciation for their employees. Taking the staff for granted can not be tolerated.
To help provide insight into what your staff needs and wants, establish an employee committee. You could not ask for a better resource, and the committee members can provide recommendations and share ideas about what would make your staff more satisfied in their jobs. Sure, the subject of salary might come up, but awarding salary increases is a whole lot cheaper than training a new worker.
Whatever employee retention tactics you choose to implement, it is important that you adjust your strategy to fit the different generations. Gen Y (born after 1980) responds to random acts of appreciation and wants to know that the company they work for has a social conscience. Baby Boomers, on the other hand, just need you to reassure them that they are secure in their job until they are ready to retire.
Now go out and make employee satisfaction a high priority at your company and commit to developing a plan to improve it.
You can do this.
Eventually we will emerge from this sluggish economy, I promise. We will see growth again, and when the economy does begin to turn around, retaining your workforce will become absolutely vital to your business. According to MetLife’s recent study of employee benefit trends, businesses need to return to a focus on employee satisfaction.
When the economy slipped into recession, many workers were laid off, and those that remained were left to pick up the slack. While corporate profits have soared, employee satisfaction has tanked as workloads increased and morale plummeted. The MetLife study revealed that 33 percent of the workers surveyed expected to have a new job in the next 12 months. It seems these workers would have left right then if they could have, but they stayed put only because they knew there were very few jobs out there.
The MetLife study also revealed that, in 2010, the percentage of employees who said they felt loyal to the company was 44 percent as compared to 62 percent in 2008. Despite the dramatic decline, employers have not seemed to recognize this change. The study showed that 54 percent of employers believe their employees feel a strong sense of loyalty. Even more concerning is that only 22 percent of these employers said employee retention was their number one priority.
Turnover is costly and the loss of employees is going to be a severe problem, but employers who start taking steps now can minimize turnover and its damaging effects. First and foremost, employers must make employee retention a high priority for the company. Profits are super, but your staff is your lifeblood and you need to hold on to them.
Second, an employee morale survey can provide great insight into how you can help improve job satisfaction. The key here is that the survey should be conducted by a neutral, outside party. The staff will feel more comfortable responding this way, and you will get honest answers, which of course, is the outcome you want.
A third step would be to use your survey results to develop a plan for improving employee moral in the coming year. Using the survey results, you can establish a benchmark for measuring improvement over time. Benchmarks can also help you determine how much effort you will need to commit in order to reach the desired amount of improvement.
An employee appreciation program makes a great addition to your plan for improving morale, and it is easy to implement. Basically, managers should just go out of their way to show their appreciation for their employees. Taking the staff for granted can not be tolerated.
To help provide insight into what your staff needs and wants, establish an employee committee. You could not ask for a better resource, and the committee members can provide recommendations and share ideas about what would make your staff more satisfied in their jobs. Sure, the subject of salary might come up, but awarding salary increases is a whole lot cheaper than training a new worker.
Whatever employee retention tactics you choose to implement, it is important that you adjust your strategy to fit the different generations. Gen Y (born after 1980) responds to random acts of appreciation and wants to know that the company they work for has a social conscience. Baby Boomers, on the other hand, just need you to reassure them that they are secure in their job until they are ready to retire.
Now go out and make employee satisfaction a high priority at your company and commit to developing a plan to improve it.
You can do this.
Sunday, October 30, 2011
Remembering Something about the Customer!
"Worry about being better; bigger will take care of itself. Think one customer at a time and take care of each one the best way you can."~Gary Comer
I really enjoy running, especially with my black lab Sophie. I have competed in a number of 5K races and am now working up to a 10K race. While my finish times are not great, I usually do pretty well among my age group.
About two months ago, while in Ft. Lauderdale, I went into a running store called Runner’s Depot. I was looking for a new pair of running shoes, and this store happened to be very close to my hotel.
The salesman at Runner’s Depot convinced me to buy a pair of Newtons, a new type of running shoe that encourages you to lean forward as you run so you land on the balls of your feet rather than your heels. This form of running, which is sometimes referred to as “Chi Running,” is great because it takes the load off my joints, especially my knees.
On my last trip to Ft. Lauderdale, I did not take my Newtons. I only had room in my luggage for one pair of shoes, and I had to pick a pair that could be used for both running and walking around.
During this trip, I stopped in the Runner’s Depot to buy a case that would allow me to carry my iPhone and listen to music while I run. When I walked into the store, the salesman – the same one who sold me the Newtons – said he saw me jogging over the 17th Street Bridge and asked me if there was a problem with the shoes. Newtons come in a very distinctive and recognizable color, and he had noticed that I was not wearing them.
As you can imagine, I felt great that months later this salesman remembered me and had noticed me running over the bridge. His consideration and concern made me a customer for life.
The point of this story is to demonstrate how establishing a personal relationship with your customers can dramatically impact the way they feel about your business. By asking about the shoes, the salesman was, in effect, telling me that he cared about me and wanted me to be the best I could. It did not take much effort for the salesman to notice me, but it made a super impression on me.
The secret here is having your employees recall some personal detail about your customers when they come back. There are many computer programs designed to help you store this information and access it easily at a later date.
Now go out and observe your staff and see how they are greeting your customers. The more personal they can make the interaction, the better. Training is very important and can be helpful in teaching your employees how to make this happen.
You can do this!
I really enjoy running, especially with my black lab Sophie. I have competed in a number of 5K races and am now working up to a 10K race. While my finish times are not great, I usually do pretty well among my age group.
About two months ago, while in Ft. Lauderdale, I went into a running store called Runner’s Depot. I was looking for a new pair of running shoes, and this store happened to be very close to my hotel.
The salesman at Runner’s Depot convinced me to buy a pair of Newtons, a new type of running shoe that encourages you to lean forward as you run so you land on the balls of your feet rather than your heels. This form of running, which is sometimes referred to as “Chi Running,” is great because it takes the load off my joints, especially my knees.
On my last trip to Ft. Lauderdale, I did not take my Newtons. I only had room in my luggage for one pair of shoes, and I had to pick a pair that could be used for both running and walking around.
During this trip, I stopped in the Runner’s Depot to buy a case that would allow me to carry my iPhone and listen to music while I run. When I walked into the store, the salesman – the same one who sold me the Newtons – said he saw me jogging over the 17th Street Bridge and asked me if there was a problem with the shoes. Newtons come in a very distinctive and recognizable color, and he had noticed that I was not wearing them.
As you can imagine, I felt great that months later this salesman remembered me and had noticed me running over the bridge. His consideration and concern made me a customer for life.
The point of this story is to demonstrate how establishing a personal relationship with your customers can dramatically impact the way they feel about your business. By asking about the shoes, the salesman was, in effect, telling me that he cared about me and wanted me to be the best I could. It did not take much effort for the salesman to notice me, but it made a super impression on me.
The secret here is having your employees recall some personal detail about your customers when they come back. There are many computer programs designed to help you store this information and access it easily at a later date.
Now go out and observe your staff and see how they are greeting your customers. The more personal they can make the interaction, the better. Training is very important and can be helpful in teaching your employees how to make this happen.
You can do this!
Sunday, October 23, 2011
Do Not Get Stuck in Running Your Business
"Fear less, hope more; eat less, chew more; whine less breathe more; talk less, say more; hate less, love more; and all good things are yours." ~Swedish Proverb
Growing a business, even in today’s economy, requires change and an ability to adapt, particularly where behaviors are concerned. You just cannot continue to operate the way you have in the past and expect to take the company to the next level.
Running a mature and dynamic operation requires a different set of skills than starting a business, and many entrepreneurs find it tough to adjust. As businesses grow, they typically get stuck at two levels: around 10 or 15 employees and around 75 employees. At both of these sticking points, it becomes necessary to introduce a new management environment with a new set of systems and procedures. The entrepreneur must let go of how he or she managed in the past – making every decision, for instance – and adopt a much more hands-off management style.
We were helping an entrepreneur in the travel technology business. The firm had been in operation for just over eight years. Sales were around one million dollars, but flat.
Since day one, the owner had been the firm’s only real salesman. This arrangement may have worked at the beginning, but as the firm grew, the owner inherited more and more responsibilities, including managing his 12 employees. He spent almost all of his time working in the business rather than working on the business. With sales efforts falling off, the company was suffering.
When I encouraged him to bring in an assistant who could help with the operational details or hire a new sales person, he just could not do it. Bringing in someone new would mean he would have to let go of his old behaviors, relinquish management of the minutia and focus on the tasks that would help the business expand.
We had many, many discussions with this entrepreneur to show him how his behaviors were keeping the company from achieving its full potential, but convincing him was tough. He had seen his behaviors work well when he started the company and was sure they were working still.
In light of the entrepreneur’s resistance, we finally just had him try making small adjustments to his management style – delegating more and the like. He was more tolerant of these small changes, and after seeing the success he was having, he was more willing to try our other suggestions. Little by little, the entrepreneur implemented all the necessary changes and his company is now doing much better.
Now go out and see if your behaviors are limiting your company’s growth. If they are, consider making the changes that will help take your operation to the next level.
You can do this!
Growing a business, even in today’s economy, requires change and an ability to adapt, particularly where behaviors are concerned. You just cannot continue to operate the way you have in the past and expect to take the company to the next level.
Running a mature and dynamic operation requires a different set of skills than starting a business, and many entrepreneurs find it tough to adjust. As businesses grow, they typically get stuck at two levels: around 10 or 15 employees and around 75 employees. At both of these sticking points, it becomes necessary to introduce a new management environment with a new set of systems and procedures. The entrepreneur must let go of how he or she managed in the past – making every decision, for instance – and adopt a much more hands-off management style.
We were helping an entrepreneur in the travel technology business. The firm had been in operation for just over eight years. Sales were around one million dollars, but flat.
Since day one, the owner had been the firm’s only real salesman. This arrangement may have worked at the beginning, but as the firm grew, the owner inherited more and more responsibilities, including managing his 12 employees. He spent almost all of his time working in the business rather than working on the business. With sales efforts falling off, the company was suffering.
When I encouraged him to bring in an assistant who could help with the operational details or hire a new sales person, he just could not do it. Bringing in someone new would mean he would have to let go of his old behaviors, relinquish management of the minutia and focus on the tasks that would help the business expand.
We had many, many discussions with this entrepreneur to show him how his behaviors were keeping the company from achieving its full potential, but convincing him was tough. He had seen his behaviors work well when he started the company and was sure they were working still.
In light of the entrepreneur’s resistance, we finally just had him try making small adjustments to his management style – delegating more and the like. He was more tolerant of these small changes, and after seeing the success he was having, he was more willing to try our other suggestions. Little by little, the entrepreneur implemented all the necessary changes and his company is now doing much better.
Now go out and see if your behaviors are limiting your company’s growth. If they are, consider making the changes that will help take your operation to the next level.
You can do this!
Sunday, October 16, 2011
Marketing Research for your Business
"Circumstances may cause interruptions and delays, but never lose sight of your goal. Prepare yourself in every way you can by increasing your knowledge and adding to your experience, so that you can make the most of opportunity when it occurs."
~Mario Andretti
Opening a business or expanding a product line is a big step, but so many people base this decision on their belief that there is demand or on affirmations from their friends and relatives that it is a great idea. However, your feelings or those of friends and relatives are not sufficient measures of future demand.
We were helping a very nice couple who wanted to start a pet store. The couple, who had many pets of their own, thought they would be well suited to operate a business like this, and their friends and relatives had encouraged them to move forward out of a desire to be supportive.
Despite their passion, we advised them against starting the business based on market conditions, but the couple decided to give it a shot anyway. Unfortunately, the business lasted only two years before the couple had to file for both personal and business bankruptcy.
About a year after the business closed, I ran into the couple at a restaurant and they wanted to talk. Their only real regret, they said, was that they did not do enough research on market demand in their area. In hindsight, it was clear that the market was already saturated with pet stores.
Collecting market data before moving forward with a new business venture or product line is so important. Generally speaking, doing your due diligence will decrease your chances of making wrong decisions based on insufficient information.
Marketing research comes with a price tag, but the expenditure will prove worthwhile in the end. Knowing the demand for your product or service allows you to accurately assess the viability of a business and limit your risk of failure.
When starting a business, most people generate a proforma income statement and rely on this statement to tell them whether the business will be successful. The impediment here is that the proforma income statement is driven by a sales forecast. If the forecast is not prepared correctly using valid data, the income statement will be inaccurate and viability can not be assured.
The best way to get the hard data necessary to generate an accurate sales forecast is by employing a marketing research firm. Information is such a valuable commodity when faced with these decisions and you need to make sure that you hire the best help you can afford.
There are many methodologies for obtaining actual demand information for a new product or service, but three key approaches are considered standard in the marketing research industry. The first of these is phone surveys of potential customers. A second method is the focus group, which typically produces high-quality results. With focus groups, you identify small groups of potential customers to participate in in-depth product analyses. The third standard method is conducting a survey of potential customers via mail or email.
Now before you undertake a new business venture or introduce a new product or service, make sure you use information obtained through marketing research so you are better able to ascertain future demand.
You can do this.
~Mario Andretti
Opening a business or expanding a product line is a big step, but so many people base this decision on their belief that there is demand or on affirmations from their friends and relatives that it is a great idea. However, your feelings or those of friends and relatives are not sufficient measures of future demand.
We were helping a very nice couple who wanted to start a pet store. The couple, who had many pets of their own, thought they would be well suited to operate a business like this, and their friends and relatives had encouraged them to move forward out of a desire to be supportive.
Despite their passion, we advised them against starting the business based on market conditions, but the couple decided to give it a shot anyway. Unfortunately, the business lasted only two years before the couple had to file for both personal and business bankruptcy.
About a year after the business closed, I ran into the couple at a restaurant and they wanted to talk. Their only real regret, they said, was that they did not do enough research on market demand in their area. In hindsight, it was clear that the market was already saturated with pet stores.
Collecting market data before moving forward with a new business venture or product line is so important. Generally speaking, doing your due diligence will decrease your chances of making wrong decisions based on insufficient information.
Marketing research comes with a price tag, but the expenditure will prove worthwhile in the end. Knowing the demand for your product or service allows you to accurately assess the viability of a business and limit your risk of failure.
When starting a business, most people generate a proforma income statement and rely on this statement to tell them whether the business will be successful. The impediment here is that the proforma income statement is driven by a sales forecast. If the forecast is not prepared correctly using valid data, the income statement will be inaccurate and viability can not be assured.
The best way to get the hard data necessary to generate an accurate sales forecast is by employing a marketing research firm. Information is such a valuable commodity when faced with these decisions and you need to make sure that you hire the best help you can afford.
There are many methodologies for obtaining actual demand information for a new product or service, but three key approaches are considered standard in the marketing research industry. The first of these is phone surveys of potential customers. A second method is the focus group, which typically produces high-quality results. With focus groups, you identify small groups of potential customers to participate in in-depth product analyses. The third standard method is conducting a survey of potential customers via mail or email.
Now before you undertake a new business venture or introduce a new product or service, make sure you use information obtained through marketing research so you are better able to ascertain future demand.
You can do this.
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