Small Business Archives - Page 3 of 5

November 14, 2008May 24, 2013

Spend or withhold? When should you spend? And how much?

I will raise more questions than answer in this post.

Spending extravagantly is not good for a small business. That is clear in my mind. I have seen more businesses that spent liberally struggle, fail and die than ones that have controlled their costs. This is true even if you have venture funding. The funding will only last some months unless you can earn revenue commensurate to the expense.

Spending is easy. Earning revenue is difficult. And it takes much much longer than we anticipate. The reason why we have to stay tight with the cash is that we don’t know how long we have to wait to earn revenue. And

waiting costs money – to keep the business relationships alive; to pay salaries, rent, utilities bills etc.

The case for thrift is the easier one. The more difficult question is when should you loosen your purse strings and by how much? There is no one answer to this question. Each of us small business persons has to decide on our own based on the circumstances we face.

However, there are a few aspects that are currently helping me:

1. Know the right time to spend; experiment in small amounts and confirm that it works before spending large sums

2. Keep a reserve – enough to survive about 6 months. The reserve is untouchable; you can only spend the reserve if you have gone out of all other options

I am not among those who believe that they can leverage (take a large loan) and take big risk spending it. If you do that, your business becomes a hit or a miss. It is a decision you have to make if you want to do that.

What are your thoughts on this topic? How have you benefited or lost because you have chosen to spend? How did you make those decisions?

About the author: Chaitanya Sagar is an expert in small businesses and is the CEO of www.p2w2.com, an online marketplace for services like writing, business consulting, research, software, online-tutoring etc. You can find good service providers and collaborate with them on p2w2.

Picture credits: Night Star Romanus iChaz

November 4, 2008May 24, 2013

Get gatekeepers on your side – get access to decision makers

How much time and attention can you devote to those who guard the offices of the CEOs and decision makers?

They are a pain! Are they?

There are “experts” out there who would advise you to bypass the gatekeeper to gain access to the decision-maker because time is money.

I know of an editor of a lifestyle magazine who has used just the opposite strategy — of respectfully cultivating the friendship of the Personal Assistants and Personal Secretaries to other editors, not just in her organization but rival ones too — and has gained unlimited (almost!) access to a number of decision makers.

I analyzed her behavior and her success lies in treating the gatekeepers with dignity. She recognizes the importance of a gatekeeper’s role — to filter out nuisance elements from her boss’s life and she treats him/her as a professional on a one-on-one level and not as someone’s minion.

The result? They too treated her with respect and trust her judgment enough to keep her in their loop.

This strategy — of empathizing with the role of another professional, however lower down in the hierarchy — costs very little but gets you rich returns. It gets you in the good books of all the decision makers you need. Whosever needs any dope on what is happening in the media industry has to step into her parlor and come out armed with authentic, first-hand information.

A mistake that many make is think that it pays only to network at the top, forgetting that in order to be able to able to get to the top they must first cultivate friends at the bottom rung.

They forget that gatekeepers are after all trusted lieutenants, who have been appointed by the CEO themselves to filter out useful from the non-useful contacts. The gatekeepers segment visitors. In management jargon, they constrain the flow of knowledge and information in an organization, which is no mean a job by any stretch of imagination.

Therefore, the first rule in dealing with a gatekeeper is: do not discount her influence. She may not be the final decision maker, but she is an influencer and getting the person on your side as an advocate can often cut-short the decision making process. She will then act as your agent in selling your business proposition to the boss.

Here’s a good discussion worth reading on this topic and a quote from someone called Lighthouse24 on BOA’s community.

“My advice is to think of every gatekeeper as your “agent” — someone in each company who is doing the groundwork to “promote” your business inside that organization, and who will get you an “audition” with the boss when the time is right. Don’t think of them as people who keep you OUT — because they’re actually the people who can get you IN if you take them time to build a relationship with them.

A decision maker isn’t going to buy imprinted mugs or kick off a new promotion all by himself — there will be meetings and conversations, and the gatekeeper will have several opportunities to shine by having information and answers when the decision maker needs them (which you will have been providing for months while building the relationship). When the executive is ready to move forward, the gatekeeper will schedule you first. When you pitch, you’ll only have to sell on one level (convincing the decision maker to buy from you instead of someone else), and you’ll only have to sell one time to be assured of all future business if you perform satisfactorily.

If you go around the gatekeeper and approach the decision maker directly as some have recommended, you’ll have to sell on three levels (convincing them to listen to you in the first place, convincing them that they need what you’re selling, and then convincing them to buy it from you). Plus, if a good gatekeeper feels that you “trespassed” and made her look bad, she WILL become the person who keeps you out in the future.”

About the author: Chaitanya Sagar is an

expert in small businesses and is the CEO of w ww.p2w2.com, an online marketplace for services like writing, business consulting, research, software, online-tutoring etc. You can find good service providers and collaborate with them on p2w2.

Picture credits: kyz

October 9, 2008May 24, 2013

If You Want to Make It, Look for a Mentor

For me, thoughts about mentoring started from this article: “Everyone Who Makes It Has a Mentor.” (Collins & Scott. 1978, Harvard Business Review) Having a mentor is helpful because someone who has already been there and done that can shorten your learning curve saving you time, money and failure.

Because mentoring is a social relationship, a one-on-one bonding with a senior, who continues to believe in your abilities whatever the odds, you will discover that most successful people in this world have always had a mentor in their lives.

Who Is a Mentor?

Let’s not look for definitions. If you felt that you needed guidance from someone so you can avoid mistakes and get into a higher orbit, that someone is a mentor.

Any trusted advisor can be your mentor and serve as your sounding board. The litmus test for a good mentor is that instead of being overtly concerned with your short-term welfare, a mentor would always be more interested in your long-term, personal growth, even if it comes at a price. One mentor on that LinkedIn forum confesses, “I have to hold myself back from actually writing business cases or marketing materials and stick to the role of advisor/coach/friend/mentor.”

A Mentor Listens, Probes, Clarifies and Advises

“Mentors may be thought of as teachers. They may develop their protégé’s intellectual and career skills. They model, inform, confirm or disconfirm, prescribe, or question. Mentors may also act as sponsors, assisting protégés in developing and sharing their own network of personal contacts. They protect, promote and support. Mentors may act as counsellors, providing advice, guidance, and moral support and nurturing. They listen, probe, clarify and advise. The mentor may act simply as a host or guide, sharing an informal social network with the protégé. Mentors may serve as exemplars to their protégé. The mentor may provide a standard of excellence that the protégé will aspire to surpass.” (Source: Mentoring for the New Millennium)

A mentor is someone you can offload all your problems to — both personal and professional. A trouble-shooter, he or she is someone you can use for

validating information picked from a variety of sources. You cannot check the veracity of each of these sources, but you can trust your mentor.

Mentoring Works

The benefit of having a mentor in your life is that you do not have to re-invent the wheel. He or she can pave the path for you. Above all, mmentoring is a continuous process of evaluation and guidance. Remember that a mentor will never thrust his own ideas on you. He will be more interested in polishing the diamond that’s inside you.

And age can be no barrier to find a mentor at any stage of your life. In fact you can find different mentors at different stages of your life. There’s a very tale of how a 50-year old Auckland-based businessman, Mr. Warwick Kendon, climbed the ladder of success at that age through a mentor. He said mentoring allowed him “to unlock the potential of his business and get into a much stronger position in the market.” Another example: Joyce King Thomas, the chief creative officer at McCann Erickson Worldwide’s flagship agency in New York cites mentoring benefits.

It’s a Two-Way Learning Process

A point to bear in mind is that the flow of learning in a mentor-protégé relationship is always two-way, the mentor benefits as much from the relationship as the protégé, otherwise it’s a static relationship. In my own experience (I have been more a mentor) sharing knowledge and helping others succeed gave me a lot of satisfaction.

Share Your Mentoring Experience

If you haven’t found such a mentor yet, I suggest that you begin your search as soon as possible. If you were involved in mentoring, please share your experiences.

If You Want to Make It, Look for a Mentor

Picture credits: Sridgway Army.mil Korean Resource Center

October 2, 2008May 25, 2013

(part-2) Building Trust with Your Customers Helps You Reach Your Goals Faster-2

In the previous post, (Building Trust with Your Customers Helps You Reach Your Goals Faster-1), I talked about benefits of building trust.

Elements of trust

Everyone wants to be trusted – especially sales persons and consultants. You want your customer to come and listen to you. However, not many achieve in being trusted. I was amazed when I read a book called “Trusted Advisor” (affiliate link – p2w2 gets paid if you buy), I realized that there is a pattern of behavior that helps generate more trust in your relationships.
If you look at page 4 (using “look inside” feature of Amazon) you will see “traits that our trusted advisors have in common.” In that, I like the following:

– They are consistent (we can depend on them)
– Help us think things through (we make the decision, they don’t force their recommendation on us)
– They stay calm
– Are reliably on our side and always seem to have our interests at heart
– We can rely on them to tell us the truth

Who do YOU trust?

Take for example, a car dealer. Which dealer do you trust? It’s likely that you the person:
• Is pleasant and polite to you
• Asked for your needs and heard you patiently
• Empathized with your need
• Respected your time and attended to you promptly
• Understood your need
• Gave all the options you have
• Let you make the decision
• Follow up and deliver on all the promises

Trust is a natural outcome when they know that you keep their interests in mind.

Trust gets generated from experience; not testimonials

No matter how good a marketing material you can generate, it can never generate trust. At best, a customer can try you. But she will start trusting you only after trying out your product or service and after she is satisfied.

Before we close…

Log on to Trust Quotient self-assessment quiz. I recommend this quiz because that tells you where you stand on the trust question. Here are some of

the questions it asks (you have to select between Never, Rarely, Often, Almost Always and Always):

1. My word is my bond (I keep and deliver on my promises; I see keeping my word as a matter of personal integrity)
2. I work to make sure there are no surprises when I’m around
3. People tell me me I’m honest and open
4. I am consistent and predictable
5. People confide in me (they tell me things they often don’t tell others)

You might actually learn many traits that you love and give you ideas to enhance others’ trust in you.

This quiz computes your trust quotient (TQ). With this quiz you can do your own assessment of your credibility, reliability, intimacy, and self-orientation. The quiz, based on the work of Charles H. Green, who defines TQ as:

Where:

TQ = Trust Quotient (trustworthiness)
C = Credibility
R = Reliability
I = Intimacy
S = Self-orientation

Remember that can be a fabulous economic strategy—the strategy for our times.
But if your only reason for winning trust is to make money off others, nobody is going to trust you.
That’s the paradox of this trust thingy.
If you’d like to know more about the “T’ Factor in a business relationship, I would recommend that you begin by reading by David H. Maister and Charles H. Green’s Trusted Advisor.

Picture credits: Mijita Janielianne hbp_pix

September 29, 2008May 25, 2013

Building Trust with Your Customers Helps You Reach Your Goals Faster-1

Tell me, do you think you will benefit if your clients trusted you more? What are those benefits? Likely answers could be you’d:
1. Gain more customers
2. Get repeat orders
3. Make more money
4. Earn more respect in the community you service
5. Lead a more contented life for having done your job well
Hm… let me think. These are the objectives of your business! If you are trusted more, then it leads to achieving your business and personal goals, faster!

If people trust you, they won’t mind paying extra
The best news about this whole trust business is that you can charge a premium for trust. Trust can be a fantastic investment into your business.

Trust does involve some risk
Charle H. Green, a noted expert on trust, asks: Have you ever recommended a competitor to one of your top clients? This is the acid test of establishing trust in selling. A salesman who willingly shares information that would serve the interest of his customer — even if it’s about a rival — is actually putting his customer’s interests ahead of his own and the customer is not so dumb that he would not notice it. He would reward the sales person with more trust and most likely will strike the next deal with him/her!
If you are able to manage a short term business risk for the long-term benefit, you would have no problem establishing trust with your customers.

Trust can overrule cynicism

I’ve often heard people say “it doesn’t work this way in the real world…”
“It’s a dog eat dog world out there..…no body trusts anybody, anymore…” This is a sort of cynical outburst that only trust can overcome.
Have you ever wondered why when you go out to buy a mobile phone, a watch or a TV set, why do you always go to your most trusted dealer?
There could be glowing testimonies on the net for a brand that your dealer does not stock, but you would disregard all that and out aside your cynicism and still go to your old dealer —

why?
Because when it comes to actual buying, you want your “own” dealer, even if his store may not be as swanky or uptown as the one advertised in the newspaper.
Winning brands build trust relationships. They constantly back-up their best marketing plans with the best service. And that builds trust.

Elements of trust in the next post

Trust is the foundation of any successful relationship. If you would like your customers to trust you more and want to know what to do, we will talk about elements of trust in the next post and recommend you a book that will help you do that.

Building Trust with Your Customers Helps You Reach Your Goals Faster-1

Picture credits: Dideo Spoon CairoCarol