Thursday, October 29, 2009
The word outsourcing will make most people cringe including myself because of what some companies have been outsourcing, but outsourcing should not be a bad word but you have to do it right.
Outsourcing has gotten plenty of publicity lately especially with so many companies outsourcing their customer service functions to places like India. Recently I had issues with my Internet Service Provider and it turned out the company I go through has outsourced everything to India. This is where the problem arises because the guy on the other end of the line only knew what the computer told him to do; by the end of the day I changed ISP’s to a company that does not outsource their customer service functions.
That is where many companies are absolutely failing when it comes to outsourcing. Instead of outsourcing functions that do not directly affect the customer, they are outsourcing their direct link with the customer and putting their customers and their futures in other’s hands.
So what should you outsource?
As a small business owner there is plenty of areas that you can outsource that will not affect the service your customers get but improve your operations and finances.
An example of outsourcing that a small business owner should seek is accounting services. While I have extensive experience with numbers, many small business owners are not numbers people and should try to find someone that could do their paperwork better than they could.
Another popular source of outsourcing for small businesses in the last few years is virtual assistances. Virtual Assistants do a large range of tasks that will free your time to build the business.
In other words outsource tasks that someone else can do better than you can or that will free up your time to be more productive. What you do not want to do is outsource anything that will affect the level of customer service that your customers will receive.
There are other side benefits of outsourcing including giving business to your fellow small business owners, having more people who know about your business and if you treat them right will talk about your business, and finally another source to network with.
So by all means outsource, just make sure you do it right.
Monday, October 26, 2009
Image by pixelposition via Flickr
Now that we have talked about the importance of goals and the different time frames, we will discuss the daily goals in a little more detail.
As mentioned last time you should have long term goals, medium range goals, and your short term goals that should be broken down even farther into monthly, weekly, and yes especially daily goals.
You should get up every morning, or better yet write down your goals for the next day before you go to bed. So that you can see the big picture I suggest that on divide a piece of paper with several columns with sections for the priority, what the goal is and most important how that goal relates to your long range goals. That way you can see how accomplishing that goal will build you toward the place you want to be in five, ten years or more.
You will also want to write down the goals you have for the day that may not directly tie into your long range goals but before long you will see that everything you plan to do that day will start fitting into those long range goals.
The next item on the agenda is to prioritize your daily goals in order of importance. I usually letter them A, B, and C. If something is a lower priority than a C, then it really is not important at all and should not be a goal for the day, correct?
Next take a look at the A category. Is there anything on there that is something you’re not looking forward to doing? Then do that item first so that it is over with and you do not have to think about it for the rest of the day. Do the same thing for the other three categories of priority so the stuff you’re not looking forward to is done and over with first.
At the end of the day go through your goal list and note anything that you did not accomplish that day. Figure out what you did get that goal accomplished:
1. Will it take longer than done day to accomplish, then try dividing the goal up into several sections and completing a section each day.
2. Something that you were trying to avoid, once again get this done first so that you do not have to think about it the rest of the day.
3. Too many goals for the day? We will go over this next time.
As Rick Pitino says in his book “Success is a Choice” you need to go through your goals and not what you accomplished and figure out what you did not accomplish and figure out why and how you can do things differently tomorrow.
If you are seeing to many A or B items not get done then you should evaluate what is keeping you from accomplishing important things. Are you getting distracted? Are you being interrupted by outside influences? Trying to bite off more than you can chew?
After a few weeks you will have a better idea of how a goal setting system will work for you and get you on the road to accomplishing more.
Tuesday, October 13, 2009
Image via WikipediaToo many small business owners fall into the trap that they have to have the biggest and the best equipment to operate their business.
Whether it is buying the latest and greatest computer, having the new, trendiest office furniture, or going out and leasing the copier that will do everything for you including make coffee; many small business owners fall into the got to have it trap.
I am not saying that you should go out and buy cheap crap that will not last you however; you need to become a smart shopper.
Let’s take a look at office furniture. If your customers will not see your office, then there is no reason for you to spend thousands of dollars on new office furniture. The desk I am currently using was purchase for just over a hundred dollars and has served me for more than 6 years now.
If your business is in an industry where clients or customers will see your office then you will want to find something a little nicer. However that does not mean you need to go out and buy new furniture.
There are plenty of stores around that sell used office furniture that will look nice but not cost you an arm and a leg. Another great source for furniture is on line ads. One of our local television stations provide classified ads and has become a major source of good used items at really good prices.
It comes down to figuring out your true needs for the next couple of years then being a smart shopper and finding the best product for your money. Don’t spend more money than you need to in order to get the furniture and equipment you need.
Monday, October 12, 2009
Image by Darrren Hester via Flickr
Last week I discussed the importance of having goals. Today I will go over the different ranges of goals and how they interrelate to each other.
First you have your long range goals. These are goals that are more than five years away. While it seems like a long time, your other goals are ones that build up to these goals. For example you can have a goal that in ten years you want to be able to sell your business and retire. Another long range goal could be to have a certain amount of money in the bank for your retirement.
On the personal side you could set a goal to have your child’s college education funded by a certain time. Another example would be that you plan to have your dream home in 7 years.
You need to take the time to deice where you want to be in 5, 10, 20 years and so on and what it is going to take to get you there.
Next down the list is your short range goals. These are goals that you want to achieve in 5 years but will not be accomplished in the next year. They are goals that are stepping stones to reaching your long range goals.
For example, if you set a goal to have enough money in the bank to retire in 20 years, in 5 years you need to have a certain amount of money in the bank. Or you can set a goal to be debt free in the next 2 years that will set you on course to hit your big goal of retiring without having to worry about Social Insecurity.
You could set a business goal that in five years you want your business to be making 2 million dollars or you want to move into a new building in 3 years.
Finally you have your short range goals. If the medium range goals build you toward your long range goals then you probably can figure out that short range goals build you toward your medium range goals. These are goals that you plan to accomplish in the next year.
Short range goals are broken down even further to year goals, monthly goals, weekly goals, and daily goals. Once again you look at where you want to be in the next year and plan your goals accordingly.
What do you have to do this month in order to reach your one year goal? Once you know what you have to do this month, you want to break it down and figure out what you will have to do this week.
Of course you know what is coming next, once you figure on what you need to accomplish this week then you want to break it down and figure out what you have to do today to reach that goal this week and so on.
At this point you probably feel overwhelmed. It will take too much time to set all these goals, and you don’t have the time.
You will be amazed what you can accomplish when you are actually setting goals for yourself on a daily basis. You begin to realize what is important and what you just do not need to do.
Other great thing about short range goals is that they get you excited. When you hit that short range goal it energizes you and the next thing you know you are busting out the next you and the one beyond that.
Now there will be days that you are just hit with multiple road blocks and it seems that nothing will go right. You have your goals but you just cannot hit any of them that day. That is when you need to take a look at your long range goals to get some motivation. Also take a look at what goals you have accomplished to see how far you have come.
Friday, October 09, 2009
Wednesday, October 07, 2009
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You have your niche in the marketplace, but you decide that you want to head a different direction in order to capture a different part of the market. However, if a major corporation such as Wal-Mart and Nordstrom’s failed at changing their niche, is it possible for the small business owner to change their niche? Yes, it is possible but you have to do it very carefully.
First of all let’s take a look at what happened to Wal-Mart and Nordstrom’s.
As anyone who has been alive for the last 20 years knows, Wal-Mart’s niche has been the lowest common denominator, the lowest price shopper. Not the smartest shopper who wants value for the dollar but the customer who only looks at the price and not what is in the package.
The problem with having this niche is that there is not a lot of margin in this market. Realizing that they are quickly hitting market saturation in the United States, they knew that they would have to make more money off of their products in order to continue improving income.
Seeing the success that Target was having, they decided to move that direction. However, in the stores that they tried to upscale, they lost their core market and sales begin to flounder and the experiment was stopped. Wal-Mart is now moving more upscale but doing it much more slowly and not trying to alienate its existing market.
Nordstrom’s has always been known as the customer service retailer. You did not go into Nordstrom’s for low prices or the hippest fashions; you went in there if you wanted good service. Seeing that their core market was aging that they were not brining the younger market Nordstrom’s decided to change their focus by bring in the hip and trendy. Once again it failed as Nordstrom’s core market was alienated and sales went down not up.
The lesson to be learned is that you can change your niche but you cannot alienate your existing market. You can slowly bring in or start building new items, but you also want to keep your existing customers happy with the products they have been buying all along.
Take time if you want to move your niche and don’t alienate the people who have kept you in business.
Tuesday, October 06, 2009
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One of the things I have discussed in the past I am going to do it again, and that is the importance of an emergency fund.
Recently there was a story on the news about how businesses are being affected by road construction. Most of the businesses are hurting loosing a large part of their regular business.
While all of them are hurting, several of them are weathering the storm better than others and they specifically mentioned that they had an emergency fund to deal with situations like this.
You cannot hide your head in the sand. One day the road in front of your business will be torn up. You can scream all you want but the work will and needs to go on.
However, it is not just construction that can affect your business. You need to be prepared for any eventuality.
A good emergency fund of three to preferably six months of expenses will get you through most of these kinds of emergencies. If you road in front of your business is going to be torn up for a year, that means that you could have a 50% drop in business and still survive the work. Or if a natural disaster happens and you are not able to open your business for a few weeks, you will be able to deal with the emergency.
Having an emergency fund may be the difference between you staying in business and putting out the going out of business sign.
While mostly focusing on personal finance, Dave Ramsey is a good source of information on getting your finances in order and showing the importance of having an emergency fund.
Monday, October 05, 2009
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To be successful you must have goals. In your business you need to have a business plan which will set out the goals for your business and the numbers behind them. You also need goals in your personal life which will set you apart from most of the population.
When most people think of goals they think of New Years resolutions that they usually break in the first week. But a goal is more; it requires more of you so that you can get more out of it.
Here is the heart of a goal so that you can start putting some together.
First of all a goal must be written down. By writing the goal down you are making a commitment to accomplish it.
Second a goal must have a time period. Someday just does not work when setting a goal. If you want to loose 20 pounds then you must set a realistic timeline to accomplish it. If you want to do it in one week you are not being realistic. If you set a timeline of one year, you are not taking the goal seriously.
Third a goal must be specific. You must have a specific target to hit. If you want to loose 20 pounds you cannot set a goal that says that you would like to loose some weight. Saying that you would like to pay off some debt is not a specific goal, but saying you would like to be debt free in 24 months is a specific goal.
A goal must also be realistic. If I set a goal to be a player in the NBA by next year, the goal will not be realistic. First of all I have only played basketball a few times in my life. Second I am older than players coming into the NBA and third my height would be an issue.
So you have the basics of what needs to make up a goal. Now get some goals written down.
For more on setting goals head over to the expert goal setter himself Zig Ziglar for more ideas.