The Problem With Partnerships

The Problem With Partnerships

Evaluate, Featured, Improvement

conversationIn this blog, and in the Businetiks system, we talk about focusing on your core competencies. To handle tasks outside our skill set, we rely on partners and suppliers. Choosing a partner goes beyond making sure they can do the job. Choosing the wrong partner can be fatal.

An example of this is Borders Book Stores. At one time, Borders was the largest book store chain in the United States. In the late 1990s, they made a mistake. Looking at what was needed, they knew they had no expertise in online sales. They looked for a partner that could handle online fulfillment and the design and implementation of an online store. They chose Amazon as a partner. The rest is history. Amazon took Borders online business and the company never recovered.

There’s more to a partnership than matching skills. You have to look at what the long-term goals of each partner is. The personalities of the people and the cultures of the organizations have to be taken into consideration. Make sure that you are compatible with your partner during the partnership and can trust them if the partnership ends.

To see how The Modern Observer Group can help you grow your business, contact us here.

Compare Apples To Apples

Compare Apples To Apples

Evaluate, Featured

comparing apples to applesIt is natural to compare yourself to others and compare your company to others. It is a simple way to point out your strengths and to gauge your progress as to move toward goals. However, it is important when making comparisons to compare apples to apples. Major differences in what you are comparing can make your conclusions irrelevant at best and incorrect at worst.

An example is a recent article in a British newspaper comparing the London Underground and the NYC Subway. While the article touted the advantages of the London Underground, the two systems are not really comparable. The article ignored the fact that the NYC Subway has four times the amount of track and serves three quarters of a billion more people each year. As a result, the comparison was of no use.

A comparison is useful to provide a frame of reference. If someone is not familiar with you or your company, it is tempting to say it is like something they know. Instead of comparing directly, focus on what you do best. Talk about your strengths and don’t worry about a comparison. Each person and business is unique. You don’t know what goes on behind the scenes that makes someone else make decisions, so comparing them to you is irrelevant. Just be best you can and keep improving.

For more information on how The Modern Observer Group can help you and your business grow, contact us here.

Watch Out For The New “Consultants”

Watch Out For The New “Consultants”

Evaluate, Featured

Businetiks AdvisoryThe fastest growing job title in the post-great recession world is consultant. According to Webster’s Dictionary, the definition of a consultant is one who gives expert or professional advice, but the term is being misused by most. Here is a quick overview of the consultants that are coming to knock on your door:

  • Sales: A true consultant is not a salesperson. They are there to benefit you. While they may suggest products, they don’t work for the company that provides them. The biggest group of people that misuse the word consultant are network marketers. They sell their products under the guise of being health consultants or lifestyle consultants, but their advice is usually limited to what product to buy.
  • Unemployed: Unfortunately after the great recession, there are many people who are still unemployed. Previous employment in a field does not make them a consultant. First and foremost a consultant needs to be an expert. If someone offers you consulting services, ask about their background. Ask about their expertise. Look them up online and see what comes up. Some of these people may eventually become real consultants, but they need to prove it.
What Will You Stop Doing?

What Will You Stop Doing?

Evaluate, Featured

There is so much discussion about what you will accomplish. Just as important as what you will do is what you will stop doing.

A key part of being productive is getting rid of tasks and habits that aren’t helping you. Most of us are familiar with the 80/20 rule (80% of your time is spent on 20% of your clients and 80% of your income comes from that 20%). What are you doing in that other 20%. What can you cut out to make that time more productive?

It is important to evaluate how you spend your time. If you find things that are not paying off and don’t have any benefit, stop doing them.

Don’t Grow Your Business Too Fast

Don’t Grow Your Business Too Fast

Evaluate, Featured

growthYes, growth is a good thing. But high growth can easily overwhelm a small enterprise, and put it at risk of going under. Before you push your company toward an audacious sales goal, know the following:

  • Understand your true operating costs. Know what they are and how they evolve as your business grows. Rapid growth will increase the cost of doing business and you need to be prepared.
  • Get a solid grasp of your working capital needs. Understand how much cash your firm requires to conduct day-to-day business.
  • Look at more than your income statement. It’s not the only index of health. To get a quick pulse of how your business is doing, you need to look at other metrics besides revenue. These include cash available, status of accounts receivable, inventory, and other metrics specific to your business.
To Beat Burnout, Assess How You’re Spending Your Time

To Beat Burnout, Assess How You’re Spending Your Time

Evaluate, Featured, Improvement

Time ManagementRelentless stress can easily lead to burnout, but it doesn’t have to. Reassess your schedule and make time for self-care. Start by taking a few minutes to look at exactly how you’re spending your time over the next week. This can be done on paper, in a spreadsheet, or in a productivity app.

For each block of time, record:

  • what you’ll be doing
  • whom you’ll be with
  • how valuable the activity is
  • how you’ll feel afterward using a scale from one to 10, where one is angry or drained and 10 is joyful or energized.

At the end of the week, pinpoint the activities that negatively affect your mood and take action to limit them. Use that recovered time to do things that boost your energy. And set aside time for restful, positive activities away from work, like taking a yoga class or spending time with friends.

What Does Free Really Cost?

What Does Free Really Cost?

Evaluate, Featured, Planning

giftAn educational group unveiled a proposal to provide free preschool for every child in the United States. The cost of the program is $200 billion initially and then $20 billion per year. My first thought upon hearing this was, “that’s not really free is it?” If something costs $200 billion, that money has to come from somewhere. That got me thinking about what free really costs.

Many of us use free services provided by Google, Yahoo, Facebook, etc. We also know that these free services are paid for by advertisers. n return for the free service, we have given up a lot of information including geographic, demographic, and psychographic information. We have given away so much information on these free services that they can tell us where we are, who who our relatives are, and what we will be doing a week from Tuesday.

In the case of the education program mentioned above, the proposal looks to the federal government to pay the cost. Of course that means the government will pay for it with our tax dollars, which ultimately means we are paying for this free service. I was at a meeting that talked about free services that state government offered. The programs are paid for by the utility companies, who collect a fee from us on every bill to cover the cost. Again, we are paying for the free service.

We all like free, but pay attention to how the free program is being paid for. You may find the cost is more than you bargained for.

Draw a Picture of Your Business Model

Draw a Picture of Your Business Model

Evaluate, Featured, Focus, Planning

CoachingGrowing companies face a predictable problem: Over time, the business becomes too complex for its own good. To untangle this complexity, forget over-engineered PowerPoint presentations or lengthy reports. Turn to pen and paper, and draw a picture of your business model. What does it look like at its most basic level? Make clear in your drawing what really matters to the business. Focus on the key outcomes, whether they’re in-store sales or revenue from secondary products. Then think through and write down what causes those things to happen. With this picture in front of your team, dive into the implications for what the organization should be focusing on — and, more important, what it could stop doing. If a unit can’t clearly show a link between what they do every day and the outcomes they hope to drive, resolve to eliminate it. The simplicity of a hand-drawn model can also help to separate out responsibilities, streamline communication, and determine decisions more quickly.

Scarcity Can Be An Asset

Scarcity Can Be An Asset

Evaluate, Featured, Improvement

scarcityYou have a great product. Your customers love it. Should you offer them more?

That seems like a simple question. However, many businesses that jump at the chance to expand find themselves expanding too much and overshooting demand. It isn’t just small businesses that have this problem. The NFL recently found themselves in the same situation. After years of increasing demand they expanded their games to Thursday night. Then they started broadcasting on Twitter and Yahoo. Then, much to their surprise, their ratings started dropping across the board.

The NFL failed to realize that what made their product successful was that supply was limited.  Additionally, the quality of the games shown decreased. Scarcity was their friend. By decreasing scarcity, they also decreased demand.

Don’t assume that demand for your product is unlimited. Talk to your customers and find out why they like your product. Use that information to make sound decisions about expansion plans.

How To Decide What To Compromise On

How To Decide What To Compromise On

Evaluate, Featured

compromiseMost important business decisions require compromise: To do one thing, you have to give up or postpone another. Next time you need to decide between conflicting priorities, try doing these three things:

  • Set boundaries. Establish which options are on and off the table. Filter choices by asking: What are we absolutely unwilling to do?
  • Balance the timing of wins. Ask what you’d be willing to trade in the long run for some important short-term gain — and vice versa.
  • Gauge support. Estimate who will support a particular idea and who will oppose it. Ask whose backing you can live without, and whose buy-in you absolutely need.