Part 4 - Up and Running
- Assess your progress
- Hone your management skills
- Retaining and motivating employees
- Marketing expansion
- Developing sales
- Embracing technology
- Managing your finances
- Up and running your business: wrap-up
Once you launch your business, you're caught up in the day-to-day details of running it, and it often feels as if you're in perpetual fast-forward.
But, difficult though it may seem, it's important to make time to assess how you're doing--and to get into the habit of stepping back on a regular basis. It's about finding creative new ways to tackle challenges and opportunities, improve productivity, react to change, or make something better. In this section, you will find solutions and ideas that you may not have thought of before.
"Most people vastly underestimate the time it takes to run a business. They don't realize that for every billable hour of work, they're probably going to be working two non-billable hours doing things like marketing, bookkeeping, returning phone calls."
Steve Pellarin, Manager
Small Business Centre
Probably the best way to assess your progress is to revisit your business plan. If you prepared a comprehensive plan, you established projections for where you should be at key milestones, like six months and a year.
Have you achieved what you set out to in the first six months?
- Are your sales what they should be?
- Are your expenses in line?
If not, it's time to find out why. The sooner you take steps to rectify the situation, the more likely it is you'll be able to turn it around quickly.
You need to look carefully and honestly at the main areas of your business--and remember, if you need help with this, contact your local Small Business Enterprise Centre.
What a Small Business Enterprise Centre manager says about assessing your progress:
"We're always so close to what we're passionate about that it's very easy to get into the 'rut' where you stop seeing the opportunities simply because of the walls you've created. Seeking outside guidance and information is priceless."
Ken Laffrenier, Manager
Lack of management skills is the biggest single cause of business failure according to Dun & Bradstreet, a leading provider of business information. Good managers make optimum use of money, people and other resources to achieve their goals; and they keep and interpret thorough records to evaluate changes, trends and weaknesses.
- Are you spending enough time on activities that move your business forward, such as sales?
- Are you being as efficient with your time as possible? For instance:
- Are you out selling when customers are available and doing non-revenue-generating work after business hours?
- Are you having meetings when a phone call or e-mail would be just as productive?
- Are you prepared for meetings and do you also include an "action agenda" to remind yourself--and your employees--about next steps?
- Are you the best person to sell your product/service? If not, who is?
- Can you make better use of the Internet to market and sell your product/service?
- Do you need to hire more people or delegate more effectively to free yourself up to focus on key areas?
- Is your staff, including any contract workers, performing the way you want--and need--them to? If not, what steps can you take to ensure that they do? For instance:
- Have you been clear about their responsibilities?
- Have you encouraged their input?
- Are you providing effective leadership? For instance:
- Do your employees understand your goals for the business?
- Have you made it clear which tasks are most important for achieving those goals?
- Do you provide positive feedback as well as constructive criticism?
- Do you reward your employees for their hard work and dedication?
Here are three excellent ways to help you hone your management skills and evolve into a strong business leader:
- Join entrepreneur associations or groups. There are a multitude of these for small business owners, like Chambers of Commerce and Boards of Trade, that can provide a valuable support network, including insights and ideas on how to manage better.
- Find a mentor. You can ask an experienced business person you admire to mentor you. There are also a number of formal mentoring programs for business owners offered through industry associations, the government, the Internet and other sources. Check out the Centre For Business and Economic Development Business Mentoring Program and MaRS Discovery District. The best mentoring relationships are based on:
- pre-defined goals so that both partners understand, define and agree to the learning goals;
- a co-learning approach, where both mentor and mentee gain by learning from the other person's experiences;
- and sharing things that cannot be taught in school - life lessons learned from experience.
- Create an advisory board. Here are some things to consider:
- What kind of support are you seeking? This could include new contacts, business intelligence, strategic marketing guidance and management issues. Write down your expectations and the role of board members.
- Who are the best prospects to approach? Look for those with the skill sets, industry expertise and fit you need.
- How can you find the right people? Let key customers, suppliers, your accountant, lawyer and banker know about your search and ask for their suggestions. Some of them may even by potential candidates. Another good source is through business organizations and industry associations.
- How will you get the most out of your board? Set clear expectations up front and try to compensate your board members. That can range from expense reimbursement to a fee paid per meeting to an annual honorarium.
Check out the High Peforming Advisory Boards report if you want to learn more.
What a Small Business Enterprise Centre manager says about honing your skills:
"Seek out mentors you can learn from, even build your own advisory committee of mentors and don't reinvent the wheel. If you don't have certain expertise, you can also look into taking a night course at your local college to develop your skills."
Business Enterprise Centre Owen Sound
Quick Tips from Entrepreneurs
"Join a support group or network of entrepreneurs. You need to talk to other people going through the same thing."
"Create an advisory board to help guide growth and provide that 'been there, done that' kind of experience."
Real Tech Inc.
Finding, motivating and retaining good staff is often a bottleneck for business owners. But taking your business to the next level is all about managing and leading people and having the right systems in place. With the new Internet generation of workers bringing unique expectations - from work/life balance to fast-track advancement - managing and retaining employees can be more challenging than ever.
Your leadership style will set the tone and culture of your organization. Remember that you are the role model. Having a strong vision, communicating well with employees and balancing your weaknesses with the strengths of others through teamwork are critical leadership qualities. Empower employees by having good, clear job descriptions and be sure to delegate responsibility rather than tasks and hold them accountable for results. The more you involve people, the more loyal they will be. Avoid the temptation to micro-manage.
Be sure to have regular performance reviews in order to give your employees constructive feedback. And remember that informal praise and acknowledgement for good and exemplary things that employees do on a daily basis will go a long way in motivating them and creating a positive culture.
If you are faced with poor performance by an employee, take specific and timely action. Point out the problem, ask for the employee's perspective, agree on a course of action and timing and point out the consequences. Always document the performance problem and discussion.
Make continuous learning a part of your culture and commit to developing people so they can grow. This will pay off in terms of increased productivity, contributions and retention. And don't forget to include yourself in the training plans. Your own professional development is equally important.
Money is not the only motivator. There are many other employee incentives that you can introduce to create a positive working environment that will help motivate and retain your staff.
For more on managing your human resources, check the Definitive Guide on Becoming an Employer of Choice
Quick Tips from Entrepreneurs
"People today, particularly a younger workforce, like a looser environment. It's also important to treat people with respect, which will make them feel validated. This can go a lot further than money in motivating employees."
Combat Sports Inc.
"Share your objectives with your employees. I let them know that they are not working for me but for my customers and that I work for my customers, too. Communicating that we are on the same team builds bridges with employees."
Kokimo Candles Ltd.
"My advertising dollars and allocation have changed dramatically in the last few years because of the Internet and because some of the more traditional techniques weren't working as well as they once did."
Now that you are up and running, you need to constantly revisit your marketing strategies and methods. If you have basic tools in place, like your website, how can you leverage them? Check out the Marketing Expansion Quick Tips for ideas and for other options that may have been too expensive at start up. You can also visit Canada Business.
Determine up front what success will look like. Measure one thing at a time. And take action based on results. For web metrics, be sure to sign up for Google Analytics. And don't be afraid to ask customers how they found you and what they think about you.
More and more, consumers are expecting to be able to make purchases online, and if your competitors are e-commerce enabled, they may be making sales to customers that could have been yours.
A lot of small business owners put e-commerce on the back burner for various reasons, including set up costs, lack of web technical expertise, and the lingering assumption that only big companies do it. Nothing could be farther from the truth. Ask yourself if you've ever made an online purchase, then ask yourself if your customers would be inclined to do so too.
To get a handle on what it's all about, start by visiting E-Business Resources, and reviewing its toolkit and resources. The site will help you learn about e-commerce, assess whether it is right for your company, and advise you on implementing e-commerce. Its resources include an e-commerce readiness assessment, and it will help you develop an e-commerce strategy and identify e-commerce solutions.
Through Industry Canada's Small Business Internship Program (SBIP), small and medium-sized enterprises can access financial support to hire a post-secondary student intern to assist them in the adoption of e-business strategies to increase productivity and competitiveness.Finally, for more information on e-commerce, check with:
- Canada Business. Its E-Business page provides a wealth of information on what's involved in e-business, including how you can secure your website and transactions on the Internet, and available programs and resources.
- Business Development Bank of Canada (BDC) It also offers valuable information on e-business and its site includes e-business relevancy, readiness diagnostics to help with e-business planning and financing options.
Quick Tip from an Entrepreneur
"If it makes sense for your business to sell online, your Internet strategy shouldn't be an afterthought. Create a good online experience for your customers."
Xystar Technologies Inc.
You may be sending a regular email broadcast or e-newsletter to your customers already, which is an effective way to keep your business top of mind with your target market. Now can be a good time to ramp up your online offerings by creating blogs, podcasts or even a video to showcase your expertise or demonstrate your product or service (you can open a corporate YouTube account for this). Adding content to your website frequently has the added bonus of increasing search engine optimization and boosting your site in the rankings.
According to a 2010 study by Ipsos Reid, the number of Canadians using social networking sites had increased from 39% to 56% in the previous 18 months. And this phenomenon is not just a big hit with the younger generation. While 86% of Canadians aged 18-34 have a social network profile, 60% of those aged 35-54 and 44% of those aged 55 or older are exploring social networks. If you're using social media tools (blogs, Facebook, Twitter and LinkedIn) to market your business, it's probably time to develop a social media strategy if you don't have one. Create a policy that includes your objectives for each site and any rules you have around posts, articles, etc. And make sure you frequently monitor what's going on with your presence on these sites.
The growing environmental consciousness in the marketplace represents an opportunity that you should explore. Thinking green can help you to re-imagine your business, inspire employees and create new products. If you have been embracing sustainable practices to reduce costs, increase productivity and be socially responsible, an additional bonus to such activities is in marketing. Your customers care about the environment, and will appreciate companies that also care. Take every opportunity you can - on your web, through social media and e-marketing, and in printed materials - to promote the green activities of your company.
One caveat: don't claim more than you do. Overblowing claims or "greenwashing" can backfire. Make sure that any environmental friendly claim that you make can be documented, is clear, specific, accurate and not misleading.
Even your marketing activities themselves can take green initiatives. You can reduce your carbon footprint with your direct mail programs through best practices ranging from targeting customers more accurately through to printing with inks that don't impact the environment. Visit Canada Post for more.You can read about six award-winning green companies in Think Green.
Ontario is committed to making our province a global leader in clean, renewable energy and conservation, creating thousands of jobs, economic prosperity, energy security and climate protection. Read about the Green Energy Act to find out more. In addition, check these links to provincial regulations, programs and initiatives that address environmental issues
What Small Business Enterprise Centre managers say about marketing expansion:
"As you get more revenue, you can begin to expand your marketing with things like developing your database and producing an e-newsletter for customers and prospects to keep your business top of mind plus using more traditional media like advertising. Put a marketing plan together with a percentage of dollars to match the sales - rather than thinking 'I don't have enough sales so I can't afford to market.'"
Jane Phillips, Manager
Business Enterprise Centre Owen Sound
"There's a definite movement towards greening your business. If you see an opportunity to move in that direction, I encourage it. However, if it's not immediately cost-efficient or something that will make you money, then it won't be a realistic endeavour."
Ken Laffrenier, Manager
It's not enough to have a superior product or service. Once you have created awareness through your marketing, you have to get out and sell it. At the end of the day, if you don't have a cash register that's ringing, you don't really have a business.
Sales is a process, and what your sales process should be depends on where you fit in the spectrum of a standard (routinely selling the same thing) or customized product or service. Customized products require a more complex sales process and more dialogue than a "transactional" sale.
One way to look at the sales process is from your prospect's perspective. Ideally, you want to provide them with a solution to a perceived problem. For this, you need to be a good listener and build a relationship, however brief, with your prospect. You certainly don't want to be perceived as pushy or self-serving. Here is a good process to follow to ensure a successful sales call:
- Investigate your prospect's needs by asking both open and closed questions
- Present the benefits to your prospect of your product or service (not just its features). What problem does it solve?
- Be ready to handle objections
- Close the deal/sale (this last point may seem obvious, but sales trainers will tell you that it can be the most difficult skill to acquire)
Successful salespeople tend to possess certain personality traits:
- Passionate about the product or service they are selling
- Great communicators.
A great salesperson can make it look so easy that it doesn't look like selling at all! If you don't share these traits, you should consider hiring someone who does.
Motivating salespeople is largely based on compensation. There are a number of ways to compensate, but most are based on commission. If you want sales staff to sell only, then a high commission rate is best. If you want them to perform tasks other than selling, like afterservice, then a lower rate is more appropriate.
Here are some additional compensation considerations:
- If you are selling multiple products, is the amount of commission going to be the same for each even if the profit margin is different? Create the motivation that is best for your business.
- Is the sky the limit, or do you create a ceiling? Constantly review your sales compensation arrangements. If one individual is making a great deal more money than anyone else, it can be problematic and you might have to rebalance.
Other motivators include:
- Cash bonuses
Give your sales staff the tools they need, starting with a good CRM (customer relationship management) system. And ensure your website is up to date and complements your sales process. To save costs, hire and train existing employees at the same time. And to further boost sales, develop sales training for everyone in the company to teach them how to upsell or to improve customer relations.
A company isn't just about sales, of course. Now that you've made the sale, you've got to deliver the product or service, making your happy client a repeat customer. Make sure you know what your salesperson promised and deliver on it. Conversely, make sure your sales staff is in the loop on any customer issues.
There are of course decisions to be made on a company level to help boost sales. These can range from adjusting your price or modifying your product/service to adding an e-commerce component to your website. Jump start your thinking about ways to increase sales with these quick tips.
For more on sales and customer relationship management, visit Canada Business
Quick Tip from an Entrepreneur
"Be organized and track your sales. You don't need big, expensive sales software to do this. Even a simple spreadsheet can work at the beginning; as you grow, there are online processes to track and measure sales."
Palomino System Innovations Inc.
Once your business is up and running, you will want to explore more ways to leverage technology to streamline processes, improve productivity, and save time and money. This can include online tools, software, hardware and the ever growing number of techie gadgets and tools that are hitting the marketplace. The choices are immense and it's easy to get overwhelmed. Focus on those that can help you achieve your goals faster and improve your bottom line performance over time.
Here are just a few things that can be very useful to small businesses if you aren't already using them:
- Online banking for 24/7 ability to transfer funds, pay bills and manage your business finances
- VoIP for free long-distance via the Internet (eg.Skype, iCall and others)
- Web conferencing to cut down on expenses and travel time for meetings (eg. WebEx, GoToMeeting and others)
- Webinars to access training and development for you and even your staff. Many of these are free to small business owners. You can also run webinars yourself to market to new prospects and/or to train customers.
- Wireless handheld device for access to e-mail, data, the Internet, contacts, personal organizer, and phone when you are away from your office
- Customer relationship management (CRM) system to track your contacts and leads, turn sales and marketing leads into customers, and fill customer needs. These systems allow you to manage your sales and marketing process more effectively and to more accurately forecast sales and project revenue.
Your financial health is important if you want to sustain and even grow your business. One of the most common financial problems for small business is not a lack of revenues, but the uneven timing of them, which can lead to cash flow problems. In order to avoid a sudden lack of cash, it is a good idea to keep rolling cash flow projections.
A cash flow statement is simply a picture of how much cash you have at a particular time. Your accountant or bookkeeper can help you put together a rolling cash flow that you can use to project cash shortages in the future. There are also online tools that can assist. That way you can plan expenditures around shortages.
The acid test of your general financial health is your quick ratio--your current cash and receivables versus your current liabilities. If your quick ratio is below 1.0, you're in trouble. And even if it's 1.0 or better, there may be things you can do to improve on it.
You have more control over your bottom line than you may realize. Have you have done everything to maximize profitability and cash flow?
- Are your customers paying on a timely basis? If not, how can you get them to? For instance:
- Are your payment terms stated clearly on all invoices?
- Are they too generous (compared to industry standards)?
- Have you got a plan of action to collect your accounts receivable?
- Are there ways you can reduce your costs? For instance:
- Can you find a less expensive supplier or suppliers?
- Can you cut back on inventory and make purchases more efficiently?
- Can you cut back on client entertainment?
- Can you put off making major purchases?
If you need help tracking down the cause(s) of your problems--and coming up with solutions--get help:
- consult with your accountant
- brainstorm with your colleagues and/or employees
- meet with your local Small Business Enterprise Centre (SBEC) consultant or business mentor
- consider taking business courses at your community college or high school
- establish an advisory board
When you've finished your assessment, adjust your business plan accordingly--and make a note to review it again in three to six months.
As any successful entrepreneur will tell you, the only constant in business is change, so learn to embrace it! Be alert to changes in the economy, your industry, your market and your customers and be ready to respond quickly.
There will be mistakes and failures that will come along before you reach success. The secret is to learn from them, examine where things went wrong and develop a plan for avoiding similar mistakes. And always remember that the next phase of your business can be as exciting as when you first thought about becoming an entrepreneur.