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Banks and Business Loans

2010-07-11T16:58:00.000-07:00

Writing an Effective Business Plan:

Careful Planning Stands Behind Every Success

One of the first steps in getting a new idea or venture "off the ground", or expanding, acquiring or refinancing a project, must be the development of a well-prepared business plan.

Preparing a proper business plan could not only prove to be time consuming and frustrating to a business owner, but lack of objectivity and understanding of the market, and competing technologies, products and/or services, structures, economic trends and financial planning could seriously impact on the effectiveness of the plan as well as the viability of the venture.

For these and other reasons, Standard Edge provides business owners an opportunity to prepare a business plan that is understandable to themselves, bankers and other parties.

After all, writing a business plan is not an academic exercise; It is an in-depth, logical, practical and critical analysis of you ideas, business strategies, personal goals, and short and long term objectives.

Standard Edge is chosen by their clients for their knowledge and expertise in specific disciplines.

Equally important are the creative skills in communications and writing that Standard Edge possesses so that business clients have an in depth understanding of how the business should grow and operate.

An analysis of thousands of proposals show that, 50% were rejected after a review of the summary, 36% because of poorly prepared plans and 11% because of unverifiable information, poor management or a lack of proper planning.

A well written business plan should set definitive goals and objectives and allow you to measure the results.

It should define clearly what business you are in, as well as where you intend to go in the future.

It should identify your strengths and weaknesses (if an honest and critical approach is taken in developing the rationale for being in business and continuing to be in business).

It would also show how successful or unsuccessful you will be you recognise the changes occurring every single day in your business.

A business plan is a selling document and as such should be organized and written to appeal to potential supporters of your business.

Obviously, a plan written for a bank may not provide the information that would be of interest to a strategic partner or key customer. Therefore, it is important to recognize that more than one version may have to be written depending on the target audience.

In our present business environment, "strategic planning" sessions are now being held by many companies to determine what next to do to survive the "ups and "downs" of the business cycle.

Always approach writing every new plan as an exercise in "forward planning".

This is because in writing a plan you must always ensure that the information presented in the plan is substantive, can be quantified, verified and confirmed by independent sources.

Therefore, writing a business plan requires careful thought and a concentrated effort as you must be able to show clearly what the business is going to accomplish, why it will be successful, how the venture will be financed, the return on investment for your client as well as the investor, and who is going to be responsible for achieving the stated objectives.

Careful planning stands behind every successful venture.

It is absolutely essential that you, when writing the plan, recognize the importance of proper strategising, planning and evaluation in undertaking this exercise.

When writing a business plan for a client, you must always recognize that, your business plan is a reflection of the business.

Ultimately the business plan will equate directly to the quality of the person writing the plan - and that is YOU!

The Role of Leaders

2010-07-10T00:13:00.000-07:00

The Role of Leaders

Demands and expectations of a business leader have never been higher. But just how does a leader develop winning strategies, execute them brilliantly and develop organizational capabilities and core competencies?

Leadership is about getting results for your followers. If you get results, people will support you, often without caring too much about how you got them; without results, all the style or charisma in the world won't retain the support of your followers for long. This is true for the leader of a Scout troop, a sports team, a political party, a government department…and a business. A business leader must increase value.

To be an effective leader requires you to do five things:

Understand and interpret the environment in which you operate;
Develop winning strategies;
Execute them brilliantly;
Measure the impact of your strategies systematically, adjusting strategies as indicated;
Develop organizational, departmental, team and personal capabilities.

1. Understand and interpret the environment in which the enterprise operates.

A leader has to be able to sense what's coming up ahead, to see opportunities that should be the target of action and to see threats before they materialize. And the view has to be well into the future. As a researcher once noted, "It's no good mistaking the edge of the rut for the horizon."

Business opportunities are often created or destroyed by both direct influences of economic, political, societal and technological forces as well as complex interactions between these forces. Whole industries were created by the development of the transistor; socialized medicine limits the growth of medical services in many countries; periods of economic growth and slowdown, or realignment of currencies, affect businesses in many ways; and political movements to the right or the left may create opportunities for the private sector to grow or, sometimes, may result in the state taking over functions from private enterprise.

Those who foresaw the fall of the Berlin Wall, the emergence of China as one of the world's great economies, the resistance of many countries to genetically modified foodstuffs, the dramatic realignment of the U.S. dollar against the euro and other currencies in the early part of this century, made – or lost -- fortunes. This outward-and forward - looking requirement cannot be delegated to a small set of specialized scenario-creators or confined to a few days or weeks of the year.

2. Formulate winning strategies

If leadership is about getting results, then the role of the leader is to develop the right strategies to get those results -- winning strategies. Businesses make money by creating value for a customer and then capturing some of it for themselves from what the customer pays for that created value. Strategies are much more than intentions; they describe what an organization is going to do to achieve a defined end as well as the ways and means that will be employed to do that.

The what and the how are usually accompanied by strategic plans detailing who will do what, with which resources, by when…and all the other details that allow for effective and efficient capital and people allocation and coordination. Since people generally follow leaders better when they understand why they are being asked to move in a certain direction, strategies usually provide cogent reasons for action. Strategies are needed at all levels of organizations, from the office of the CEO to the individual salesperson's strategy for their territory. And these strategies must be integrated and coordinated if they are to be well executed. People who lead their followers in the wrong directions may be effective leaders over the short-run. And the short-run may be quite a long-run!

3. Execute those strategies - brilliantly!

Strategies are only valuable if they can be executed well. And execution of any plan is only valuable if the strategy is right. Arguing which is more important is, therefore, pointless. Both are critical to success. Unique strategies are rare. There are many elements that go into the execution of strategies, key among them are:

1. The alignment of the organization's various department strategies so each and every unit and person is striving to achieve goals and objectives that contribute to the overall mission, vision and objectives;

2. Performance management, at the individual, team, departmental and organizational unit levels to ensure that the right people are recruited, trained, developed, motivated and directed in ways that support the organization's mission, vision and objectives consistent with organizational values.

3. The leadership of strategic and operational change, not just in response to "burning platforms" but in anticipation of events and states that many people in the organization cannot comprehend or visualize at the moment when change must be planned and initiated.

Many excellent strategic thinkers and planners fall short when it comes to execution. They may lack the attention span needed to concentrate on the details of large-scale organizational change; they may not be persistent enough to see those changes through to completion when faced with resistance to change; they may feel that to do these things is "micromanaging" and that their role is to focus on the "big picture."

Truly effective leaders derive strategy in part from a detailed understanding of their business and how it works, and they drive strategy through each and every business decision and the people who make things happen in the organization. They are as tenacious in implementation as they are brilliant in strategic formulation.

4. Monitor the results and make strategic adjustments.

The perfect strategy, flawlessly executed, is the exception rather than the rule. Leaders recognize the probable imperfections of any plan and take care to monitor the outcomes systematically and thoroughly, always being prepared to make adjustments or completely change the strategy.

The best strategies and plans incorporate measurements, but smart leaders are always alert to the unanticipated: the competitor who responds differently than the way you thought he would; the sales force that cannot recruit enough people of sufficient quality to execute the sales plan, at least on the preconceived schedule; an unanticipated change in legislation that makes it impractical or illegal to take a certain approach to the marketplace; a market that turned sour; a product that did not live up to expectation.

Really effective leaders understand the frailty of strategic plans. They also understand that if they act promptly they can often make mid-course corrections to plans that can put them back on track, or they may even find a superior solution. Furthermore, they are never blind to the idea that they may have made a mistake. In its early days, Dell experimented with retail outlets -- briefly!

Then Michael Dell realized that he was moving away from the direct sales channel that was the core competence of his company. He rapidly changed directions. One of the best quotations I have ever come across is: "If you're going to eat crow, eat it while it's young and tender."

It puts a premium on the early acknowledgement of leadership errors and rapid steps to correct situations; so what if it's a little embarrassing.

Highly effective leaders also increase their sensitivity to discordant information when they are deploying new strategies. Sam Stenberg, the founder of Miracle Food Mart, had a great saying: "When three people tell you that you're drunk…lie down! But that only works if you are listening to the people.

Every great historical leader recognized that courtiers were not necessarily the best advisers of kings and they don’t retreat to their management bunkers and wait for the first official measures of success to come out. They get out there, personally, meet with early adopters, meet with people who have tried the product and did not repurchase, attend testing panels, see how trade channels respond to

presentations, and so on.

A story is told of Jack Welch arriving in a city one day to be met by a local senior general manager. As they were climbing into the car, Welch asked, "Where are we going?" and was told, "To see some of our best customers who would like to meet you." To which Welch responded, "Cancel it; I want to go see the people who aren't buying from us!"

Leaders aren't looking for flattery -- they are looking for information that will inform and improve their strategic decisions. Does this personal involvement create some concerns among subordinates that they are not being trusted to do what they are supposed to do? Yes, sometimes.

But real leaders don't get too upset about this. They would much rather risk this than to have anyone believe that they did not sweat the details, and most of those who are responsible for the details are delighted with the leadership attention they are getting.

5. Build organizational capabilities

Highly effective leaders act for both the short- and the long-terms, simultaneously. So, while they are surveying their environments, developing winning strategies and executing them brilliantly, and monitoring them systematically, they are also investing time, effort and money in building their organization's core competencies, management and leadership talents.

The business manager often cuts costs to meet profit crunches. This is frequently done at the expense of anything that promises long-term returns. Many commodity - focused companies, such as those in basic steel production, respond to downturns in the price of steel or increases in input costs by laying off people in inverse order of seniority, enacting hiring

freezes, stopping all recruitment of new people, postponing or cancelling training and leadership development. Little wonder that after 50 years of doing this, they have aging workforces, reputations as places where you go to stagnate in a role forever rather than to be developed to the maximum of your potential.

The business leader also has a keen eye on costs and, certainly in commodity businesses, is sensitive to the price fluctuations in the marketplace. But unlike the manager, he or she balances the need to cut costs with the mandate to build for the longer term. Employment costs may be cut not by hiring freezes but by buying out two "C" employees and replacing them with an "A", by cutting some lower value training programs but retaining core leadership, and by developing high-potential focused programs.

Outstanding leaders over the long haul recognize that they must continue to invest in core competencies at the same time that they produce results in the short-run. Whether it is renewing physical plant, equipment, machinery or the talent pool, it represents the future of the organization.

The great British wartime leader and statesman Winston Churchill was famous for many things, but one incident is relevant here. In the middle of an air raid at the height of the blitz on London, he called a meeting of his war planners to discuss the invasion of Europe -- probably not to take place for another two or three years. He was worried that the lack of landing craft would not allow the allies (the U.S. was not even in the war at that time) to put enough troops on the beach. So he acted to ensure that the balance between producing Spitfires now and landing craft later was maintained. Note that we are talking here about leading for the short-term and the long-term. Managers choose between the two, maximizing one or the other; leaders optimize over both. But there is more than leadership strength that must be developed.

Other core competencies, such as knowledge management skills, intellectual property, excellence in business-government relations, community acceptability, environmental reputation, all represent valuable assets that can be turned into income or other outcome measures at some time in the future. Leaders add to this store of assets rather than deplete them. Leaders that liquidate core competencies for short-term operating results may not be

doing the leadership job that they appear to be doing on the surface. Liquidating an asset may have a temporary positive impact on income but it may also have a negative effect on the balance sheet!

I have described three primary challenges of leadership -- strategic (involving both environmental surveillance and the formulation of winning strategies), executional (implementing those strategies, monitoring their impact and making adjustments as indicated), and developmental (building core competencies and cadres of leaders at all levels).

There is another, more personal challenge. Leadership can be challenging, frustrating, exciting, exhilarating, depressing, stimulating, dangerous, exhausting -- and many other things. Throughout, the leader must keep a sense of personal balance, humility and integrity. Leaders must keep on growing, learning and developing if they are to continue to be effective leaders. The leader often has responsibilities and obligations beyond the narrow business sphere -- to family, community and the broader society within which he or she operates. These must be balanced with the obligations the leader has toward the enterprise he or she leads and the people who put their trust in their leadership.

Leadership is not for everyone, and it is not something that even really good leaders necessarily want to do for all time. Above all else, leaders need to know when it is time to stop leading, to hand over the reigns to someone else. The leader that outstays his or her willingness or capacity to lead is one that will eventually do poor service to their followers, no matter how well they may have served them in the past.

Market Update July 2010

2010-07-09T23:55:00.000-07:00

This year has seen a renewed sense of confidence come back into the market. Amazingly, the economy is expected to return to normal conditions in 2011. An astounding outcome when you consider the fate of some European nations. The RBA will probably take a breather in July and August to assess the impact of the rate rises that commenced late last year. It would not be surprising that the economy will have nominal growth for the rest of the year. The rate rises have a lag impact and we should start to better understand the effects in July or August.

There are some hurdles that business owners will need to negotiate over the next two years, not least of which will be the RBA bias towards an uptrend of future interest rates.

Some key areas that could shape your performance in 2010 and 2011.

Economic growth

long-term average economic growth rate of between 3% and 4% in 2010.
the uncertainty surrounding Europe and the United States will impact our economy, however, we are more intricately linked with Asia and we should be spared any expected bumps.
sovereign debt of other nations is a potential risk to the world economy. How the governments manage this public debt remains to be seen.

Interest rates

most economists are expecting at least one more rate rise in the second half of 2010 before the RBA considers that the cash rate is back to more normal long term levels.
interestingly, the major banks are now discounting their fixed term rates suggesting that we are nearing the end of the rate rise cycle.
it would be prudent to budget for an additional 1% - 1.3% in your cashflow budget for 2011.
we believe that the banks will make a move before the RBA.
banks are finding it difficult raising funds in the wholesale markets exacerbating funding needs for the Australian market.

Inflation

inflation is expected to moderate to around 3%

Australian dollar

more stability for the rest of the year.
economists expect the Australian dollar to settle above US90c for the bulk of the year.

Employment

our determination to resist cutting jobs and using strategies such as forced holidays and part-time to work to manage labour costs helped the economy avoid a recession.
our prediction of an unemployment rate peaking at 6% was well founded. Expect the unemployment is expected to trend down and flatline around 5.5%.

Business investment

business investment will remain flat and this is causing some concern in the greater economy.
sales and profitability continue to fall short of previous suggesting that business capital expenditure will still be flat for 2010.
we expected the housing market to remain resilient and this has proven to be accurate.
recent reports suggest a flat growth model for 2010 – 2012.
recent slow down in residential lending will increase pressure on banks to provide more competitive rates that will assist first home buyers.
population demands, supply shortages and the economic recovery will most likely push capital growth to double digit figures in 2012.
the Australian dollar is putting strain on exporters.
economists expect exports to increase by 2.5% in 2010.
imports are expected to rise by around 10%.
two major factors will be the US consumers continue to cut their spending habits and reduce their debt and whether or not the US policy makers aggressively start to increase the cash rate, even tiugh it is virtually zero.

China

China's growth will be linked to accessibility of resources.
Thus will mean further pressure on commodity prices.
Westpac is predicting the world's powerhouse economy will continue with its strong growth, expanding at 9.4% during 2010.

Sharemarket

rising rates and sustainability of earnings will make 2010 and 2011 a bumpy ride.
even with improving economic growth, low inflation and relatively low interest rates there is still plenty of cash not being invested.
until investors move from a “cash security” basis, we can expect volatility.

Housing market

we expected the housing market to remain resilient and this has proven to be accurate.
recent reports suggest a flat growth model for 2010 – 2012.
recent slow down in residential lending will increase pressure on banks to provide more competitive rates that will assist first home buyers.
banks are finding it difficult raising funds in the wholesale markets exacerbating funding needs for the Australian market.
population demands, supply shortages and the economic recovery will most likely push capital growth to double digit figures in 2012.

Trade

the Australian dollar is putting strain on exporters.
economists expect exports to increase by 2.5% in 2010.
imports are expected to rise by around 10%.
two major factors will be the US consumers continue to cut their spending habits and reduce their debt and whether or not the US policy makers aggressively start to increase the cash rate, even tiugh it is virtually zero.

Retail sales

consumer confidence has bounced back but this is not reflected in the cash registers
concerns about job security and the high level of debt are playing on the minds of consumers at leats until November 2010.
foods and basic staples, cafes and restaurants (rebounding from last year) and household goods should benefit from an uptick in housing investment.
Westpac believes that retailers should enjoy stronger performance.

When the Optometry Industry Wasn’t Looking

2010-07-09T23:51:00.000-07:00

British optometry chain Specsavers arrived in Australian and changed the industry in a way that is too eerily similar to the fate of other sectors.

The market had always been dominated by OPSM and hundreds of small businesses scattered arounf Australia. Whilst OPSM is the dominant player, Specsavers has aggressively taken a large chunck of a fragmented market. It now has over 150 stores with an estimated revenue base $300 million.

Specsavers focussed its strategic growth plan by offering deep discount to customers, helping itself to the No.2 position. The implications of their strategy has been to force its competitors to lower price and more importantly slowed the rate of growth of its competitors.

Some of the collateral damage has also seen legal battles between the two groups that would make any lawyer teary eyed. However, the rising strength of the incredible Australian dollar has seen a fall in import prices for spectacles, frames and lenses and these benefits being passed on to consumers.

New technology will drive the growth the industry in a positive fashion and those businesses that are able to offer new product will be the real winners and help increase consultation revenues to offset the decrease in Medicare rebates.

The "budget" model continues to succeed in many industries – Walmart and Crazy Clarks are classic examples of providing product substitutes at cheap prices. Budget concepts ultimately change the competition and profitability of an industry – some in years and others overnight. The huge force drives consolidation and purchasing dynamics. Like any business, focussing on industry changes gives you an opportunity to stay competitive and ahead of the game. Strategy planning is so critical that its absence exposes small business to market forces that profoundly impact on future sustainability.

Looking at the optometry industry, some of the key success factors (listed below) that optometrists should be undertaking s part of the review and planning process are vital to ensure profitability and established strategic defenses.

Key success factors for operators in the industry

Effective product promotion.
Having an integrated operation
Output is sold under contract - incorporate long-term sales contracts.
Being part of a group buying, promotion and marketing scheme.
Proximity to key markets.
Having links with suppliers.
Having a loyal customer base.
Economies of scale.

For a free consultation contact us 07 38310077 / jeg@standardedge.com.au

The Myths of Business

2010-07-09T23:47:00.000-07:00

Business Myopia - The Relevancy to Small Business

Had railroad executives seen themselves as being in the business of transportation rather than the railroad business, they would have grown. Every major industry has been a growth industry, but some that have been or were riding a wave of growth enthusiasm are very much in decline.

In many cases, the result has been due to management failing to understand some fundamental questions of business. The railroads did not fail to grow because of the demand for passenger and freight business, rather the demand was filled by other industries, cars, planes and even telephones. They allowed other industries take customers away from because they assumed themselves to be in the railroad business rather than in the transportation business.

The moral of the story is that the railroad industry lacked the imagination and audacity that made them at one point in time an economic force.

In reality, companies are organised and operated to create and capitalise on growth opportunities. Companies that assume themselves to be riding some automatic escalator of growth invariably descend into stagnation. There are many

examples, such as dry cleaning, electric utilities and grocery stores.

There are Four Myths that may contribute to this:

the belief that growth is assured by expanding and the creation of an affluent population.
The belief that there is a substitute of the industry product.
Too much faith in mass production and the advantages of declining unit costs as output rises.
Too much reliance on a product that lends itself to carefully controlled scientific research, improvement and manufacturing cost reduction.

These 4 myths are a consistent reminder of the risks that businesses must carefully evaluate at every stage of the cycle. The view that an industry / business is a customer satisfying process and not a goods producing process is vital for all business to understand.

Given the customers needs, the business develops its DNA by working backwards through the manufacturing / servicing process and identifying the building blocks of the business.

All in all, the entire business must be viewed as a customer creating and customer satisfying entity.

Working as team and making sure the whole organisation is enthusiastically aware of the road map is critical for managements ability to execute the business strategies.

Would The World Miss My Business ?

2010-07-09T22:21:00.000-07:00

Purpose of Business

To understand what businesses do, you need to understand why they do it. To understand how to improve the business you are in, you need to understand its true purpose. That’s what this is all about.

When it comes to business, you can look at things in one of two lights: Good or Evil. The evil view is that the heads of major corporations exist for the purpose of taking our money from us. If you’re looking for a bad guy, few compare to the faceless evil of corporate America so often portrayed in today’s media.

If you bother to take a second look with the good light turned on, you will have to admit that successful businesses are there helping us fulfil our needs and desires at every turn in ways we could never achieve without them. Are they in it for themselves? Absolutely! Are they also in it for you? Absolutely again!

Fundamentally successful businesses are started for two reasons.

1. To help themselves
2. To help others

Yes, they can do both. In fact they need to do both to remain useful to themselves and to remain useful to others.

Think about your favourite store, maybe it’s a clothing store or even a grocery store. What happens if they raise their prices so high, or hire such rude sales people that you and your friends stop going there? They start losing money and go out of business. You probably wouldn’t care, but they would no longer be able to help themselves, at least not with that business.

Now what happens if that same business hires lots and lots of really nice people to spend extra time with you, and then lower their prices so you get everything at near cost? They start losing money and go out of business. The only difference is this time you care, because now you can’t go back to that friendly store. Now you can’t return that item you didn’t want, or get it fixed under warranty. Because they didn’t help themselves enough, they can’t help you any more either.

So what’s the solution? Simple, they help themselves by helping you. They want to do both. They need to do both. You also want them to do both.

What do businesses do?

They help others achieve their needs and wants, and they also help themselves in the process. The business that figures out how to help others the most becomes the leader. It makes no difference whether the owner’s motivation is for the money, or to help others. The only way to achieve long term success is to help others. There is no other reason for people to patronize a business, other than to get something they either need or want. If a business doesn’t help you get that as much as their competitor up the street does then they go out of business. If a business helps you so much they can’t make a profit, they also go out of business and are not much help to you in the long run.

Starting with you and your employees

How you gain the respect and the devotion of employees can ultimately take your business to the next level.

One of the planning steps I take with clients is to make them understand that building a team from the inside out is a powerful way to become an effective leader.

In my years of consulting, I have found that employees must believe that they are the “stewards of their own ship” and communicating this all too important factor can make a significant difference.

When you successfully communicate this message, you are diminish 3 HUGE obstacles:

1. Performance

2. Pay

3. Politics

I always encounter situations where employees have little interest in driving the business as they perceive that this is the responsibility of the owners. The owner is usually frustrated with the team and finds it ever more frustrating to extract better levels of work performance.

I always encounter business owners in sheer exasperation trying to “find” competent staff. In many instances, the problem is not that bad. It requires a bit of faith and an investment in systems and feedback.

Giving something to employees – in this case – responsibility and accountability can be an extraordinarily powerful tool. But you can only succeed by building a bridge.

The secret to inspiring people is helping them see something different in their life and this involves investing time and energy and careful planning.

Remember, motivation, is not something you operate but a something you cultivate.

You can’t make someone motivated, but you can influence their motivation.

Some of My Own Experiences and Observations

1. People can’t genuinely say yes unless they have the ability to say no.

2. Manage people as if they were volunteers.

3. Listening is not the same as Agreeing.

4. Welcoming ideas is a powerful tool for cultivating high levels of motivation.

5. Building rapport.

6. Increased communication always brings increased miscommunication. Always remember that human communication is not perfect and you need to work at it.

7. Real trust is given just before it is earned.

8. What risks are you willing to take to initiate trust?

9. Assume competence. Why not start thinking the best?

10. Treat people as fully competent until you see compelling evidence otherwise.

11. Encourage conversations about big questions that can never be fully answered.

We are always told that natural talent is what drives top performance, yet, I will challenges this notion.

A common factor for top performance is the “deliberate practice” of active feedback.

You may have raw talent which provides motivation and acceleration, but it is the practice that creates the performance.

I have seen employees with “average talent” achieve expert-level performance by diligently exercising best practices based on ongoing feedback.

Always remember, that the best performing businesses always want feedback from customers and employees. Businesses who want to be top of their game use advisors to get feedback, both within and outside of their organisation’s performance system.

Pushing the Limits

I always reinforce to clients that knowing more does not necessarily contribute to better performance – for this you need diligent practice based on feedback.

Consider the two following questions.

1. What are the goals for my business this year?

2. What would the world miss if my business didn’t exist?

Both are important and they will impact your thinking in very different ways.

When you have answered the first question, you proceed by taking action on the information, by ensuring that your activities and plans align with your goals.

The second question provides great value by what is NOT answered.

I have found that by keeping your answer always open and a work in progress, you are seeking higher standards. It is the unanswered part that keeps your mind searching, giving you potential for deeper insight and raising the bar.

Keeping a big question in front of you for an extended period of time keeps your subconscious and well as conscious mind digging for insight.

We rely on questions of the first type for everyday business.

· What are our goals and objectives?

· Did we generate sufficient revenue?

· What does the customer want?

· Were deliveries made on time?

Questions of the second type help us arrive at what differentiates our business from our competitors and what makes our effort worthwhile.

One of the most important elements of ongoing business success is gaining and maintaining competitive advantage. Lots of businesses talk about it, lots of businesses strive for it, but very few businesses really understand it.

Research shows that normal people are all the same - they use their mind the same and behave in the same reactive way.

So, in the post GFC, it is quite bizarre that businesses seeking to achieve ongoing success continually endeavour to recruit only those with a proven track record and past experience in what ?

Answer:

In doing the same things, the same way that led to the economic disaster that we are now living through.

Real leadership comes from vision and presence.

Presence is the hallmark of all great leaders. If you want to deliver real and tangible results, you're going to have to develop your ability to be present.

There is no complex formula for doing this.

You have to re-learn how to pay attention and I call it focus or single-mindedness.

In simple terms, I tell my clients to come to their senses and I mean this quite literally.

You need to re-learn how to pay attention to what your senses are telling you and not what you think you know best.

So, how to get you closer to your holy grail ?

a. ask the question: “What would the world miss if my business didn’t exist?”

b. pay attention!

c. begin each day with a quiet reflective few minutes to set your mind appropriately for the day ahead.

d. develop the necessary mental discipline and attentiveness.

e. get the right team !

f. always seek feedback.

“The difference between a boss and a leader is that a boss declare, “Go!” While a Leader would say with enthusiasm, “Let’s go”

The 8’C’s of Small Business Management

It’s an unfortunate fact of commercial life that the world of business does not have a theory on everything. Each situation is different and poses different challenges and opportunities for everyone engaged in the business world. Were there to be a template that all small businesses could use then life would be fantastically easy and the rewards bountiful for all.

However the economics of the marketplace and human factors dictate that this is an impossible scenario and that those business people that “play the game well” will have heightened success when compared to those that do not.

There are eight basic principles that can be used in every small business during the current economic climate to maximise the chances of current and future commercial success.

Each of these principles is discussed in depth in other articles; the key to reading this article is to provide small business owners with a checklist and a brief explanation of why each principle is important. The list is by no means exhaustive but it is this writer’s view that these 8 are fundamental building blocks for success.

(1) Costs.

One of the problems of boom times is that it breeds inefficiencies since unnecessary costs are left unattended as the company focuses on grabbing “the low hanging fruit” that these good times provide.

Who wants to spend days looking at the” leaky pipe” when there are so many opportunities of bounty?

In leaner economic periods the easy revenue dries up, but the pipe of inefficiency continues to leak. Thus it is key that all small business take a long look at all of their cash outputs and trim where necessary. This is often a painful decision, but it is essential for the future wellbeing of the company. This has to be the base point for all small businesses during hard times.

Consider Ryanair who famously cut costs by asking employees to stop using company electricity to charge their mobile phones! Excess fat can be found everywhere and in a world where cash is king, costs have to be trimmed (often to allow the money freed up to be spend elsewhere as investment in the business)

(2) Customers

Do you know who your customers are and more importantly do you understand them? Loyal customers are the commodity that everyone is scrambling for at the moment.

It is imperative that every small business has a heightened knowledge of their base. Whether you are someone that has long or short buying cycle it is incredibly important that you are viewing your customers as assets to be nurtured and developed rather than simply transactional. There is so much data that can be mined from knowing your customers and you don’t necessarily need sophisticated CRM systems to have a rudimentary yet effective customer data base.

Customer relationships can allow you to understand and predict, it allows you to foster emotional ties that are key to the customer lifecycle. If customers are the lifeblood of every business then how you interact with your customers before, during and after the transaction is the oxygen that helps keep the business alive. Your staff, if you have any, are also a key for communication strategy. How much input are you getting from them about what customers are talking about?

(3) Competition

Business is often a zero sum game. If you aren’t winning someone else is. That someone else is your competition. It constantly amazes me that so many businesses (a) don’t know who their competition is and (b) don’t know what their competition is up to.

In a world of easy access to information it’s a sin not to be constantly looking at your competitors activities.

Your competitors are looking at your business so you must be looking at theirs and be constantly thinking about what you must do to get an edge. If customers are not buying from you, where are they buying from and why? This basic thought has to be at the centre of all strategic decisions that you make. In my business of training the market is ultra competitive so when I am not successful with a pitch I need to understand why. Sometimes I can do nothing about it at the moment, but at worst its valuable information that I can use the next time I am selling.

Walt Disney remarked that he “couldn’t operate without competition”. Walt Disney knew his markets and knew the importance of competitor analysis in order to get better.

(4) Communication

It’s a sad fact of business that if you wait for business to come to you then invariably you will struggle. In the age of mass communication all businesses have to be communicating what they are doing. Don’t wait for the phone to ring, pick it up and call someone.

The internet has now provided a relatively cheap medium for all businesses to communicate with the world. Marketing doesn’t have to be hugely expensive, a wise man one said that “advertising is what you do when you can’t go and see all your potential customers yourself”.

(5) Cleverness

If the definition of insanity is doing the same thing day in and day out hoping for different results then a large proportion of businesses are trading insanely.

If you have struggled for the past 12 months and are doing nothing differently then what’s the end result going to be?

Use people to brainstorm new ideas. Try new things. Do things that you don’t like doing to get you out of a comfort zone and change the game. It’s incredible the numbers of new avenues that are open to business when they tweak what they are doing and adopt new ideas.

You must be clever with what you do and run with it.

(6) Closing

If you are not selling you are not trading.

Selling is the cornerstone of every business, without it your product or service is just another commodity. Selling brings your offerings to life. It’s a simple fact that those than can sell do better than those that can’t. Selling is a fluid dynamic ongoing process. Every interaction you have outside your company should be about the sale. You don’t have to be hard selling all the time but you must be aware that you are at some stage of the sale process constantly. Always Be Closing, never were truer words written. A lot of small business owners don’t like selling, it’s not the reason they got into business. Some people see selling as a dirty word and view it as beneath them.

These businesses will fail unless they have are lucky enough to have something that sells itself. Read any business book, the giants of business all knew the importance of selling and were willing from the start to get their hands dirty. Without the sales there can be none of the trimmings of happiness or success that most business owners aspire to.

(7) Concentration

Business has to have a focus. Business people have to understand that business is simple but that it’s not easy. By this I mean that production of wealth is not overly complicated but it’s something that need time effort and concentration. Hard work i.e. concentrating on your business is essential.

We all must train ourselves to do better, to be more efficient with our outputs. This requires focus and concentration and it’s often a long process. Malcolm Gladwells theory in his book Outliers is an example of this. To be fantastic requires huge time and effort.

The only place success comes before work is in the dictionary.

(8) Calibre

You must be good at what you do. The offering that you make to the marketplace has to be of sufficient calibre so as to be more desirable to customers than your competitors. This means that small business cannot be all things to all people and has to have a focus.

The point here is that it is essential to understand that business leaders find a way of bringing something to market and then tweak it until it’s as close to perfect as they can get it. How often have we read of people who are always scrambling for new ideas that sound great but are in fact taking them away from their core offering?

“Big think” is great fun and it’s often the “sexy” side of business however a core fundamental is that big think is useless unless the minute details are managed. The distinctly unsexy side of business is often the implementation and management of ideas, it is this attention to detail that determines the calibre of your offering and will define your success.

I firmly believe that there are no small businesses that cannot successfully adopt all of the above.

This is not a magic formula for successes. Unlike too many business books out there I do not advance a claim that success is a just “an add water and stir” process. Reading about business is great and understanding business an ongoing necessity. However success comes only from another C word, competent.

The above tips are essential for all businesses but they will not remotely guarantee success without being competently applied to your business.

At the Standard Edge, we help small business by helping them develop key strategies and plans to grow the business and take a long term role in your business.

For a free consultation, please contact us at your earliest convenience.

standard edge

Level 7, 131 Wickham Terrace

Spring Hill 4000

T: 617 3831 0077

F: 617 3319 0964

www.standardedge.com.au

Is Your Accountant A Small Business Advisor ?

2010-07-09T21:20:00.000-07:00

Not long ago, a small business owner relied on their accountant for business advice. Along with taxation and financial advice, the accountant played a vital role in their business affairs.

Fast forward to 2010

accountants are snowed under with BAS, GST, tax returns and upwards of 30,000 pages of taxation law;
financial advice is now done by financial planners;
small business is being overtaken by large companies;
the internet has changed how small business operates; and
small business owners feel overwhelmed or lost in the new era.
We know the position accountants are faced. We are accountants but specialise in business advisory services. Although we are very familiar with tax law, we work with your accountants to grow the business.

Recently I was introduced to two very different (but “identical”) prospective clients. One client had a very successful business and the other client fell upon very challenging times. They met with their accountant to discuss taxation matters once a year but never really discussed the intricate issues of business or challenges. They told me that the accountant was usually busy or did not have the skills or resources to help them grow the business. In both cases, their accountants told them to prepare a business plan for review. One of the accountants even suggested that one of their junior or middle ranked staff could prepare a business plan.

How one would delegate such a critical task without any serious input by the small business owner is for another day.

So what was the outcome of these meetings ?

As in almost every case, both of these clients had identical challenges.

lack of time;
having less personal time’
flat profit;
no cashflows;
becoming a social worker for their employees;
unable to move to the next level;
stressed;
lack of financial preparation;
lack of communication;
cashflow problems; and
spending more time in administration and operations.

Yet I simply ask the one question that is rarely answered by small business owners and seems to elude them for the life of the business…

Can You Please Describe Your Strategy ?

In both interviews, the clients went to great lengths to explain to me how they were working on improving the systems, communication and marketing plans.

Yet, when I challenged them by suggesting that they were improving the operations of the business, they became slightly defensive and almost lost in responding to such a simple question.

A simple question – Describe your strategy …

Ask Yourself: Can I describe my business strategy in less than 1 paragraph ?

The good news is that you are not alone.

The bad news is that you maybe stuck at the same level as your competitors.

The great news is that you can do something about it now !!!

The basic formula and challenges for small business are almost identical for every business. Yes, customers and suppliers may differ but the fundamentals are almost always the same.

Why is it that large businesses invest enormous resources to understand and execute their strategy and yet small business think that strategy does not apply or is of little value ?

No matter the size of the business, a lack of strategy and execution usually defines the success or lack of achievement in business.

Did you know these 6 important statistics:

75 % of businesses never prepare a budget;
20% of businesses spend more than 4 months preparing a budget and not completing it;
78% of businesses that have a budget never change it in a financial year;
85% of business owners spend less than 1 hour per month dealing with strategy;
60% of businesses do not or cannot link strategy to the budget;
92% of businesses do not report or prepare “strategy data” to help navigate the business;

What is it that makes certain businesses very successful and others struggling to make ends meet ?

How do the profitable companies stay ahead of the game and continually meet the changes head on AND do it quickly ?

The simple answer is that these companies have the benefit of understanding the power and importance of strategy –providing them with a competitive edge.

Small business owners struggle to keep pace with market change and continue to defend profit.

The impact of greater competition means that the small business owner works longer and harder – all at the expense of personal time !

In 2010, competition comes from everywhere, faster and harder and what gave you the edge today may not be there tomorrow. It’s little wonder the small business owner is overwhelmed…

Our experience has shown that many businesses that invest significant time and money preparing a business plan fail to implement it because the owners cannot describe their strategy.

Remember, if you cannot describe your strategy in 1 paragraph, the you may not have an ultimate destination.

Without a clear and easy to implement strategy, the small business owner faces the prospect of making important decisions without all the facts, or worse, will not make a decision at all.

Either way, the result could be catastrophic to the business.

The next hurdle is execution of the strategy. One you have researched, identified and described your strategy, you will need a method to execute the plan.

Working with you... we can help with both

Who is Standard Edge ?

We are expert advisors that have proven methods and systems to deal with your current business needs and problems. We know how hard it is to be in small business so we have made our services affordable and still receive the expert advices of professionals.

Businesses seek a proactive and disciplined relationship with their advisors. They want to manage their people, processes and relationships.

Numbers are no longer good enough and our firm helps change, transformation and improvement. We combine maturity, professional skills and human qualities. We have a firm grounding in business knowledge and competencies and a thorough understanding of the world of a small business owner. With a broad understanding of leadership and high standards of personal and professional ethics, we have a long term commitment to your business.

Why Choose Standard Edge ?

We are specialists in the small business sector.
We provide a “fulltime” dedicated role in your business.
We are your partners but with an external view of your business.
We discuss business on a weekly basis.
We introduce you to a culture of accountability.
Our results are proven.
Our client testimonials.
Sounding board;
Raise your standards of performance.

Our Assets Generate Value to Small Business Owners

Ability to ask the tough questions because we possess a wide range of business knowledge and expertise.
We specialise in the small business sector.
Ability to have conversations beyond the obvious.
Ability to maximize performance and structure.
Ability to challenge small business owners.
Ability to be highly innovative, creative and collaborative.
We serve as a strategic partner to the business owner and his/her team.
Ability to be a confidante in which business owners are able to share all sides of themselves; their hopes as well as their fears, their egotistical wants as well as their social needs, their dreams for themselves as well as their organizations.
Ability to inspire others at the highest levels.
Ability to hold all things in confidence and operate out of highly evolved ethical procedures and conduct.

What Are You Looking For In A Small Business Advisor

An experienced conversation partner who is a good match (i.e., where there is a strong connection between Coach and client)
An advisor who is different enough to bring about intervention, innovation and creativity to awareness.
Someone who can work beneath the strong ego of the leader and who will challenge him/her to raise standards in all areas.
Someone who is dedicated to having the business owner accomplish the agreed upon outcomes (e.g., increased productivity, increased effectiveness, shifts in leadership approach, increased organizational benefits).
A person who has “been there” and who understands through their own analytical and intuitive hunches what the organization and client issues are.
An advisor who will give strong objective feedback in a non-judgmental manner.

How Do We Do It ?

Initial interviews that determine current situation, future goals, what is missing, background of strategic plan, mission statement, financials, etc.
Scorecards for accountabilities.
Pre/Post assessments to measure results for individuals and teams, team effectiveness.
Measuring progress in terms of business acumen, being well read, personal courage, facilitation of teams, tasking for practice, stakeholder management, intellectual/intuitive awareness of the bigger picture, global-multicultural capabilities, personal and professional successes (e.g., networking, sales/marketing, and business/operational skills).
Processes for conducting business in more effective manner such as determining vision, modeling values, discerning authority, decision-making, effective meetings, handling conflict and disagreement, creating innovative methods.
Preparing and implementing a strategy budget – the most important document that you will ever have !
Intensive meetings discussing and analysing your business
Keeping your game plan on track
Powerful research to see where “you fit” in your industry
A detailed report of your industry, competitors, emerging trends and identifying potential risk points
Understanding the importance of “trade offs” and how to make decisions when you have all the facts
Helping you establish realistic and practical goals
Setting good communication systems with your employees, suppliers and customers
Establishing strong time discipline
Maximizing your relationship with your advisors

BENEFITS

Guarantee to improve the value of your business.
Allow your employees to take more responsibility.
Find weaknesses and road blocks in the business – and FIX THEM
You will SAVE money and precious time and put those valuable resources into other critical areas.
You will be able assess and understand elements that will impact your business and how to communicate the game plan to your team.
Improve your profits and better manage your costs.
Our focus is your business strategy – we are not in competition with your accountants or other advisors as we do not carry out tax or accounting work – we are specialists in business strategy and improving performance

Please contact John to arrange a free consultation on 38310077 / jeg@standardedge.com.au