“Wealth continually grows from multiplying existing resources using existing technologies.”
-Paul Pilzer
Paul Pilzer is an American economist and best-selling author who promotes the notion that economic progress and wealth are driven by technology. New technologies will continue to feed economic growth, but in Pilzer’s view, a lot of growth can come from properly utilizing the technologies we’ve already got.
Most technologies used in small business are vastly underutilized, particularly where software is concerned. We tend to learn what we need to learn in order to accomplish a certain task. We don’t look any further to see what else the program might do for us. Then, when we are faced with a new task, we whip out our trusty software manual and figure out how to do that. So we tend to use our technologies in small bites without understanding their full potential.
How might you improve efficiency and productivity if you more fully utilized the technologies you’ve already got? How might you use those technologies to better serve your customers?
Here’s a thought. Let’s say you’re using some very common software products like Word, Excel, PowerPoint, Outlook, ACT!, and QuickBooks. In your Accounting Department, even if you have only a single bookkeeper, challenge him or her to find one new thing in QuickBooks each month . . . a new tool, utility, or capability that would benefit the company and/or your customers. Find someone in the Sales Department who likes techie stuff and challenge him or her to do the same with ACT! And so on with all the technologies the company uses. Obviously, when something new is discovered, it needs to be taught and passed along to the other users of that technology.
The technologies we have available to us today are so powerful and so versatile that they can help drive a business forward more quickly and more sure-footedly than ever before.
Pilzer teaches us that these technologies are resources we should not ignore . . . that we should embrace them and use them to their fullest potential.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Monday, June 28, 2010
Monday, June 21, 2010
What Causes Sales?
Just about every business tracks its sales in some way or another. But not all of them track what causes sales. Curious, don’t you think? If we know what causes sales, we can do more of that (whatever “that” is), and our sales will go up. So why wouldn’t we want to track what causes sales?
In some cases, it’s pretty easy to see what causes sales. A company that relies heavily on telemarketing knows that if a salesperson makes 100 calls, he or she will reach the correct decision-maker 35 times, and of those, 10 will result in an appointment. Of the 10 appointments, 4 will result in a sale. So it’s simple. Calls cause sales. So if you want more sales, just make more calls.
Another company, in the construction business, consistently wins 16% of all the bids it submits. Want more sales? Just submit more bids.
A gourmet restaurant noticed that whenever a newspaper or magazine gave them a favorable review, their reservation calls surged. So they redirected money from their advertising budget and hired a public relations firm.
But what causes sales is not always so apparent.
Consider a business that advertises heavily in a variety of different mediums but can’t track which mediums are working and which are not. As a department store mogul once famously said, “I figure only half of my advertising works for me, but I don’t know which half.”
Or worse yet, consider the business that depends on referrals to bring customers to its door. Typically they will say, “We don’t know. People just come to us.” What they should be saying to themselves is, “If we’re a referral business, how can we drive referrals?” Maybe they should intensify their networking activities, or maybe they try offering an incentive of some kind for past customers to refer new business.
The point is, we can’t drive sales unless we know the root activity that starts the sales ball rolling. What causes sales is different for every business, and in some cases where the sales driver is not obvious, it may take some creativity and effort to find it, but it can always be found. And once you find it, you will have the tool you need to set a sales pace that’s appropriate for your business.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com
In some cases, it’s pretty easy to see what causes sales. A company that relies heavily on telemarketing knows that if a salesperson makes 100 calls, he or she will reach the correct decision-maker 35 times, and of those, 10 will result in an appointment. Of the 10 appointments, 4 will result in a sale. So it’s simple. Calls cause sales. So if you want more sales, just make more calls.
Another company, in the construction business, consistently wins 16% of all the bids it submits. Want more sales? Just submit more bids.
A gourmet restaurant noticed that whenever a newspaper or magazine gave them a favorable review, their reservation calls surged. So they redirected money from their advertising budget and hired a public relations firm.
But what causes sales is not always so apparent.
Consider a business that advertises heavily in a variety of different mediums but can’t track which mediums are working and which are not. As a department store mogul once famously said, “I figure only half of my advertising works for me, but I don’t know which half.”
Or worse yet, consider the business that depends on referrals to bring customers to its door. Typically they will say, “We don’t know. People just come to us.” What they should be saying to themselves is, “If we’re a referral business, how can we drive referrals?” Maybe they should intensify their networking activities, or maybe they try offering an incentive of some kind for past customers to refer new business.
The point is, we can’t drive sales unless we know the root activity that starts the sales ball rolling. What causes sales is different for every business, and in some cases where the sales driver is not obvious, it may take some creativity and effort to find it, but it can always be found. And once you find it, you will have the tool you need to set a sales pace that’s appropriate for your business.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com
Monday, June 14, 2010
Learn to Delegate
I’ve written about delegation before, but I continue to think about it because so many small business owners don’t do it very well.
Entrepreneurs often like to pull all the significant levers in the business and push all the important buttons. They built the business and know the critical parts of it better than anyone, so they don’t hand off any core decisions, responsibilities, or activities to anyone else. Yet by failing to delegate, the owner is unable to keep good people and unable to grow the business beyond his or her personal limitations. In the end, it’s a trust issue. What if I do hand off something important to someone else and they screw it up?
Here’s a way to limit your risk and gradually learn to delegate effectively.
Divide the all the company’s identifiable, distinct decisions, responsibilities, or activities into three categories: A, B, and C. When you assign an A responsibility to someone, instruct that person that this responsibility is theirs and theirs alone. They should just go ahead and carry it out. Don’t call, don’t write, don’t report to me when you’ve done it. Just do it.
When giving out a B responsibility, you instruct that person that this is still a responsibility that is theirs, but you want to be consulted before they pull the trigger on it.
You can show your subordinates a list of C responsibilities, but you don’t give those out. Those are the decisions, responsibilities, or activities that you will continue to reserve for yourself.
If this is done in a clear, well-defined way, you will have drawn very effective boundaries for your people. You shouldn’t have anyone going off the reservation and doing things they have no authority to do. In short, you maintain control. But better yet, you begin a process of delegation that can grow over time. Again, this is a trust issue. So you build trust as you see how effectively your subordinates handle the responsibilities you’ve given them. Then more of your C responsibilities can become B responsibilities and given to someone else. Likewise, a B can be transformed into an A.
This is an evolutionary way to build delegation into your company’s culture. Ultimately, your subordinates will be doing the things they are qualified to do, and you’ll be left with only those things that truly belong on your plate.
For more small business blogs, visit my website and www.rocksolidbizdevelopment.com
Entrepreneurs often like to pull all the significant levers in the business and push all the important buttons. They built the business and know the critical parts of it better than anyone, so they don’t hand off any core decisions, responsibilities, or activities to anyone else. Yet by failing to delegate, the owner is unable to keep good people and unable to grow the business beyond his or her personal limitations. In the end, it’s a trust issue. What if I do hand off something important to someone else and they screw it up?
Here’s a way to limit your risk and gradually learn to delegate effectively.
Divide the all the company’s identifiable, distinct decisions, responsibilities, or activities into three categories: A, B, and C. When you assign an A responsibility to someone, instruct that person that this responsibility is theirs and theirs alone. They should just go ahead and carry it out. Don’t call, don’t write, don’t report to me when you’ve done it. Just do it.
When giving out a B responsibility, you instruct that person that this is still a responsibility that is theirs, but you want to be consulted before they pull the trigger on it.
You can show your subordinates a list of C responsibilities, but you don’t give those out. Those are the decisions, responsibilities, or activities that you will continue to reserve for yourself.
If this is done in a clear, well-defined way, you will have drawn very effective boundaries for your people. You shouldn’t have anyone going off the reservation and doing things they have no authority to do. In short, you maintain control. But better yet, you begin a process of delegation that can grow over time. Again, this is a trust issue. So you build trust as you see how effectively your subordinates handle the responsibilities you’ve given them. Then more of your C responsibilities can become B responsibilities and given to someone else. Likewise, a B can be transformed into an A.
This is an evolutionary way to build delegation into your company’s culture. Ultimately, your subordinates will be doing the things they are qualified to do, and you’ll be left with only those things that truly belong on your plate.
For more small business blogs, visit my website and www.rocksolidbizdevelopment.com
Monday, June 7, 2010
A Word About Management Training
I was in a conversation recently with a guy who works for a technology company, and during the course of the conversation, the subject of “training” came up. He said that his company has a training budget for their technicians, but not for their managers. He said he knows this because he wanted to attend a management seminar, but the owner of the company denied his request. When he pressed the owner about it, the owner said, “We don’t have any budget for management training. We don’t believe in management training here.”
I was shocked. Not shocked that his company doesn’t offer any management training because, unfortunately, that’s a fairly commonplace condition in smaller companies, but shocked that the owner would say it in such a casual, matter-of-fact way. Obviously, this owner either doesn’t believe that managing takes much skill, or he believes that managers somehow manage well instinctively. Either way, he’s wrong.
Management training isn’t and shouldn’t be the private preserve of large corporations. Small companies might not have the resources to run big, formal programs, but with very little expense, they can still offer effective management training. For instance, I know of a small company that has a book club composed of the CEO and his managers. They agree on a business subject they want to explore, select a book on that subject, then spend an hour each week discussing a chapter. The CEO doesn’t always lead the discussion. He takes a turn, but so does everyone else in the group. As a result, the management team gets excited about various business concepts, has a good learning experience, and bonds more firmly as a group. And the only cost is for a few books.
I know a company owner who likes to hold “lunch and learns.” He sets aside periodic lunch hours for his managers and orders in pizza or sandwiches. He then invites someone from the outside to give a brief presentation and then entertain Q&A. This outsider might be his banker, his lawyer, his CPA, or a whole host of other friends, colleagues, and acquaintances in his rolodex who have some business expertise to share with his managers. And it only costs the price of a lunch.
Small business owners often complain that they can’t afford management training, but usually they can. Just because you don’t have the money for fancy executive seminars doesn’t mean you should just give up on management training. As I’ve tried to illustrate above, there are lots of ways to deliver very effective, but inexpensive, management training. It just takes a little creativity and a commitment to doing it.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
I was shocked. Not shocked that his company doesn’t offer any management training because, unfortunately, that’s a fairly commonplace condition in smaller companies, but shocked that the owner would say it in such a casual, matter-of-fact way. Obviously, this owner either doesn’t believe that managing takes much skill, or he believes that managers somehow manage well instinctively. Either way, he’s wrong.
Management training isn’t and shouldn’t be the private preserve of large corporations. Small companies might not have the resources to run big, formal programs, but with very little expense, they can still offer effective management training. For instance, I know of a small company that has a book club composed of the CEO and his managers. They agree on a business subject they want to explore, select a book on that subject, then spend an hour each week discussing a chapter. The CEO doesn’t always lead the discussion. He takes a turn, but so does everyone else in the group. As a result, the management team gets excited about various business concepts, has a good learning experience, and bonds more firmly as a group. And the only cost is for a few books.
I know a company owner who likes to hold “lunch and learns.” He sets aside periodic lunch hours for his managers and orders in pizza or sandwiches. He then invites someone from the outside to give a brief presentation and then entertain Q&A. This outsider might be his banker, his lawyer, his CPA, or a whole host of other friends, colleagues, and acquaintances in his rolodex who have some business expertise to share with his managers. And it only costs the price of a lunch.
Small business owners often complain that they can’t afford management training, but usually they can. Just because you don’t have the money for fancy executive seminars doesn’t mean you should just give up on management training. As I’ve tried to illustrate above, there are lots of ways to deliver very effective, but inexpensive, management training. It just takes a little creativity and a commitment to doing it.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
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