Competition, Growth and the Red Queen

competition and growth

competition and growth

We must all become believers at the Church of Gross Profit

Tracey launched her business about 4 years ago, and in that time she’s built something quite special. Tracey’s business sells a unique home delivered fresh food solution online for busy professionals who want to have a healthy balanced diet that tastes great as well.

Tracey’s business model is in fact so successful that it attracted not only growth but competition. Entrants copy what she’s been doing so well for the past 4 years. Some of those competitors are trying to compete on price, some are offering delivery to different areas of Sydney and others are offering different payment models.

Tracey is annoyed, she’s worried and she’s determined. Annoyed that others are stealing her ideas, worried that they’ll kidnap her customers and determined to fight the bastards. Good for her, and I’m going to fight right alongside with her and teach those upstarts a lesson they’ll never forget.

Good news and Bad news

As always, there’s good news and bad news: The bad news is that it seems that some of these bastards have actually gained a foothold in Tracey’s market, but the good news is twofold:

  • The bastards are demonstrating that there is room in the market. It’s clear that there are a lot more people who want what Tracey has to offer than she might have thought.
  • The bastards are testing some new ideas that Tracey herself has been considering for a while, but now those ideas are being tested free of charge or risk to Tracey’s business.

Tracey’s knee-jerk temptation is to attack. And the obvious attacking strategy is to meet the competitors head on and offer the same things they do. One of those things revolves around delivery options. Tracey’s products are delivered for a flat fee, by courier, on the day of ordering to a limited number of areas of Sydney. It has always been a core principle of Tracey’s, to keep the whole thing super simple. A flat delivery fee fits that principle. The flat rate means the delivery has to be restricted to certain areas of Sydney, or Tracey can’t maintain her minimum margins.

Same day delivery everywhere

But one of the new upstarts is offering same day delivery everywhere in Sydney and Tracey feels she needs to match the competition — that flexibility.

But I’ve advised her against doing so, for one reason and one reason only:

Buying growth always leads to disaster.

Sure, it would be nice to move into the untapped regions of Sydney, but Tracey would only be able to do so by paying a lot more for her deliveries. She’s costed the various options and her delivery costs to those new areas will increase by about $2 per item. $2 Doesn’t seem like much when the average price per meal delivered is roughly $30. But, the fact is that her current Gross Profit Margin (profit per meal) would reduce by 33%. At the moment, she makes about $6 gross profit per meal. With an increase in courier cost of $2 per meal, she would suddenly only make $4 per meal delivered. Doing that spells disaster, as sure as God made little apples.

Not long ago we updated our breakeven calculations for the business and we worked out that at a certain level of sales, the Gross Margin on each item sold had to be at least $5 to be able to break even. At a Gross Margin of $4 per item, Tracey would need to sell 25% more meals just to break even.

The Red Queen never stops running

It’s what someone recently referred to as The Red Queen Problem.

The Red Queen being one of the Queens in Alice in Wonderland who says:

“My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.”

In effect what Tracey would be doing by delivering to new areas at the cost of her minimum Gross Margin is running harder, but standing still. No doubt Tracey would be selling more meals if she offered same day delivery to other areas, but in all likelihood, she’d make less money than she is now, she might even lose money. The profitable areas of her business would be subsidising the unprofitable areas and if there was ever an unsustainable way to grow a business, that’s it.

Growth is irrelevant. I’m not sure who ever made growth such a focus in business, but he (and it’s guaranteed to be a he, btw) should have been strangled at birth. The blind focus on growth that we are told to chase in business is crazy. Successful business owners, business owners that build Great Small Business that are Fun and that stand the test of time are devoted believers at the Church of Gross Margin.

I have no doubt that Tracey’s business will be a Great Small business that stands the test of time. Building Tracey’s business model is much more complicated than it looks and consistently making money in this business is a tough  challenge. I’m sure that some of those new bastards are not making money at the moment and that they’ll fall over soon enough. One or two of them might get established and survive, but it’s clear the market is big enough and they’re going to be driving Tracey to innovate and come up with new solutions and new approaches to doing things and that’s healthy.

But buying customers at the expense of Gross Margin, that’s a disaster… I promise you.

For more resources, and reading on strategies for growing your business follow this link to the first of The 7 Big Questions that all small business owners want answered

FREE eBook: The 10 Truths for Making Your Business Grow

Small Business  


 

The 5 Things to Master in your Small Business in 2017

2017 new year

New Year’s advice from your business coach

5 P’s for your Small Business

As your favourite small business coach, I am supposed to tell you how to start the new year off with a bang. We’re already a few weeks into 2017, but in Australia the year never starts properly until after the Australia Day weekend of 26 January (also known as the Invasion Day weekend,) so I have a bit more time to give you my top 5 things to do in your business in 2017.

It’s not that there is anything particularly special about 2017, but the start of any year is a good place to set some powerful intentions.

These are the five intentions you should set for yourself at the start of 2017:

  • Purpose
  • Planning
  • Your fingers on the pulse
  • Systems, systems, systems
  • Social media

If you nail those 5 in 2017, you’ll truly start to build a Business that is Fun and that sustains you for years to come.

Here’s the low down on each one of the five:

Purpose:

The most important question any entrepreneur must be able to answer in his business is this one:

Why does your business exist, what’s it on this earth for, and why would anybody else care about that?

Small Business Coach Entrepreneur Obvious? Maybe, but let me tell you: the answer to that question will have nothing to do with money. (Money is never the Point, it’s a by-product at best). Neither will the answer be a variant on “We deliver a Great product with Great customer service for a Great price” (because everyone else does that too), and nor is the answer: “Because I need to pay the mortgage” (Your customers do not care about your need to pay the mortgage, they really don’t, sadly)

Nobody, but you can tell you what the answer is, but once you answer it in one short powerful statement, in a way that sends a shiver down your spine, 2017 will be a great year.

Planning:

No human endeavour has ever amounted to anything without a plan. At the same time however it can be said that all plans are out of date the moment they’re created. Planning is guessing, but that doesn’t mean we might as well stop planning. On the contrary, the secret is to always be planning. Planning is a verb that must continuously be carried out. Plan every week, every month and every year. Ideally on one page, no more.

If you are focused on planning with regularly, I guarantee you that 2017 will be the most exciting year you’ve experienced in your small business.

Finger on the Pulse:

Small Business Coach Entrepreneur In 2017, make it your focus to start to measure the important functions of your business. What gets measured, gets managed is the old saying and that wisdom holds true as much in 2017 as it did a hundred years ago. Think about the 10 or 15 key indicators of the health of your business and how you might get a weekly and monthly single measurement of those to look at. Obviously, a few of those numbers will come directly out of your bookkeeping program, such as your bank balance and gross and net profit and your revenue figures. But there are a bunch of other numbers that will give you powerful insight into how your business is going, as well.

Keeping your fingers on the pulse of the key indicators of the health of your business, I call it. If you want your business to start humming in 2017, focus on learning to measure the key numbers.

One tip though: You as the entrepreneur should not be involved in obtaining these numbers yourself. You should delegate getting the numbers to others and ensure that those key numbers land on your desk every Friday afternoon for the week just past. Delegating the reporting on the numbers to others in your business is a really important part of the process.

Systems, systems, systems:

I suppose it goes without saying, but systemisation is the secret of any entrepreneur. It’s all about predictability. I’m not suggesting that every small business must go through a process of McDonaldisation, far from it, but we shouldn’t ignore the lessons from McDonalds either. When you send one of your plumbers out to do a job, you want to feel confident that he’ll do the job smoothly, safely and profitably and that he leaves a satisfied customer behind. And when someone in your business answers the phone, you don’t want to have to hold your breath hoping they’ll not annoy the person on the other end of the line because of bad phone manners.

Systemisation is about the opposite of “Managing by keeping your fingers crossed”. Systemisation can be about small things such as answering the telephone with a simple little script as well as big things like a complete safety management systems. Only you can decide the balance between the cost of developing and implementing a system and the cost of not having one. Some things will always have to come down to common sense, but not all of them.

Read all about Money, Profit, cash flow and keeping your fingers on the pulse here

Social Media:

Facebook is here to stay

Small Business Coach EntrepreneurSo is Twitter and Instagram and Pinterest and YouTube and Yelp and TripAdvisor and LinkedIn and Google and a whole bunch of others that haven’t even really been though about yet. They will become more and more important and you simply must get on board with them if you still want to have a business a few years from now. People ask their Facebook friends for recommendations to plumbers, restaurants, holiday accommodation and accountants and then they expect to click straight to a Facebook page of that business and see reviews and opening hours and star ratings.

You may still be getting the bulk of your business outside of social media, but if you are, I bet it’s already getting harder and in 5 years I guarantee you’ll be left behind eking out a living in the margin.

20 years ago you effectively couldn’t run a business without an ad in the Yellow pages… These days the same goes for social media, whether you like it or not.

Don’t resist it any longer, make it a priority to really learn how to maximise your opportunities in social media and you’ll have great years from 2017 onwards… I promise you.

#FunInBusiness #Coaching #Entrepreneur #SmallBiz #Goalsetting #TopFiveThingsNewYear #NewYearsResolution

 

FREE Download: The 10 Truths for Making Business Fun

It’s very easy to get caught up in your business, especially when you are working hard to make it work. Learn to have more fun in your business with my start-of-the-year freebie– The 10 Truths for Making Business Fun. Because you created your business to live life on your terms – so do it!

The Ten Truths for Making Business Fun


The 7 Secrets to Building a Fun Business

Small Business Growth Strategy

Why some business grow, hum along and make money and others don’t

Small Business Growth Strategy

The most successful growth strategy for your small business is found between your ears.

Owning your own business can be a lot of fun and it can be rewarding at many levels. But for many small business owners, the experience is one of frustration and confusion. You’re the first one in the door in the morning and the last one out the door at night, often you’re back at it after the kids have gone to bed and most weekends there is some admin or quoting that needs to be caught up on. The kids are growing up and not getting the attention you want to give them and money remains as tight as ever.

I know the feeling. I’ve been a small business owner for over 30 years now and since 2004 I’ve been a business coach supporting business owners to build Great Small Businesses, what I refer to as a Fun Business (with a capital “F”), you can read more about what a Fun Business is in my books and also in a number of articles on my blog such as this one here.

Also have a look at my page on business growth, including many resources on all the different aspects of business growth here

Breaking through

But some business owners break through that stage and actually build Fun Businesses. Their growth strategy works, they make money, their staff are engaged and motivated, their customers love them and they find the kind of balance in their lives that is important to them.

What’s their secret?

Over the years, I’ve met those who have broken through and those who don’t, and I’ve learnt to spot what sets them apart.

The Big 7

The business owners I’ve met who do break through and do build Fun Small Businesses, all have these 7 things in common:

1. They’ve come to understand that their own time is the most precious resource of their business. They constantly ask themselves: Is what I am about to spend time doing, the most important thing for me to be doing right now, or should I be looking for someone else to be doing it instead of me?

2. They’ve learnt that being a great plumber/ architect/ florist/ software developer/ shopkeeper is only a very small part of what it takes to build a great business based on those professions. It can help and smooth the path in the early days, but to build a Great Small Business, the owner must learn to focus on the work of the business owner, rather than the work of the business. (Business development work in other words)

3. They have found the answer to the question: Why does your business exist, what is it on this earth for and why would anybody care? And then they are 100% committed to the answer; it drives their decisions and actions every day.

4. They’ve learnt to understand and even love their numbers. If you don’t understand and love your numbers as a business owner, you’re managing your business by keeping your fingers crossed, and that is not one of the recognised management techniques. (When I talk about The Numbers, I refer to many other numbers besides the financial numbers alone. There are sales numbers and productivity numbers and quality numbers and customer satisfaction numbers, etc. The trick is to find the key numbers of the health of your business and learn to manage your business by those numbers).

5. They hire the best people they can possibly afford and they learn how to give those people every opportunity to love coming to work and to get ever better at doing their work. There is not much as silly as penny-pinching on staff. The only thing sillier is not making it your absolute focus to ensure that your people love coming to work and do great work every day.

6. They constantly ask themselves where the opportunities are for systemisation. Whatever can be systemised, is… That doesn’t mean every restaurant must aim to be a McDonalds, but if something can be systemised… Do so.

7. They know they can’t do it on their own. They find great advisers and they ask them for help. Just because you are a business owner doesn’t mean you will be an expert at all aspects of business. You can find great consultants, advisers, coaches and mentors to help you in tax and financial management, leadership, marketing, HR, IT, staff management, sales and every other aspect of business you are not 100% confident with. Great sports people all have great coaches on board.

Those are “The 7 Secrets”, that all business owners who build a Great Small Business have come to understand and strive to apply in their lives every day.

Salvation wears running shoes

Small Business Growth Strategy Now, just so we understand each other. Accepting these statements as true, doesn’t mean you will somehow automatically build a Great Small Business yourself.

To quote a religious friend of mine: “Salvation wears running shoes.”

In other words, it’s all about what we do with our insights.

But if you do print out those 7 Secrets as your growth strategy, laminate them, hang them above your desk and make it your mission to apply them to your life as a business owner, every day, you will start to build a Great Small Business, that sustains you for years to come…

I promise you.

For more information about to how to step out of overwhelm, get unstuck and start having Fun in Business again, click here

#funinbusiness, #smallbusinessgrowth, #smallbusinessdevelopment, #SecretsOfGreatLeaders

Are there lies holding your growth strategy back? Download The 10 Truths for Making Your Business Grow, it’s FREE.

Small Business

Slow and Steady Wins the Race in Small Business

Small Business Competition

Get the boring stuff right in your business and make the competition irrelevant

Small Business Competition

It’s not hard to sell more, what’s hard is to deliver on your promises, week in week out

Early in my days as a business coach I read a book by Jason Jennings: “It’s not the Big that eat the Small, it’s the Fast that eat the Slow.”

Besides the unwieldy nature of the title, it became one of my bibles. There are various chapters in the book that I have re-read several times and I often find myself quoting from the book to my clients.

But I’ve decided that Jason Jennings and I part company on one specific idea about business. The premise of the book is that in the modern world, small fast business always outcompetes big slow business. Mr Jennings uses a number of examples to illustrate that every time a big powerful Goliath of a business comes up against a nimble little David, the Goliath gets defeated time and again, and hence the book encourages small business to grow fast and stay nimble.

I’ve stopped believing in fast growth as a strategy. These days, I believe in the “Slow and Steady Wins the Race” principle.

Growth is the easy part

As I have written previously on Smallville, growing your business is the easy part. If you do what you say you’re going to do, for the price you say you’ll charge, by the time you say you’ll do it, your customers will find you and flock to your door… guaranteed. The hard part is doing those three things… under-promise and over-deliver… every time, and make a profit… every time.

It’s relatively easy to deliver on your promises, and control your costs and your income, when it’s just you and a really small team, but once you’re not actually doing the work of the business yourself anymore and you don’t meet every client and see every job and you don’t know how your staff are doing the work every moment of the day anymore, that’s when it becomes challenging to continue to deliver your three promises and remain profitable.

Jane’s worried about the competition

Small Business Competition I’ve written before about my client Jane whose business sells flowers online in little bunches (Read about Jane here). Jane’s has a unique business model and when I first started working with Jane, she was nervous, because she thought others might, steal her business model. She was keen to grow really quickly, expand into other markets around Australia and move to the UK, Europe and the USA in the shortest possible time.

I helped her to stop worrying and to slow down. When we started working, the business wasn’t profitable yet. A lot of details in the business needed ironing out yet, nearly all of them in operations and cost control.

Boring stuff, like finding new couriers and negotiating better rates, working with her staff to increase their productivity, improving the work environment, developing better online systems, implementing better financial control systems, simplifying the admin.

Doing the boring stuff

None of it was very exciting, none of it got Jane’s creative juices flowing, none of it seemed important when seen against the threat of armies of competitors flooding in and taking away her markets.

And a bunch of different competitors did come into the Sydney market and at last count there have been three different competitors trying to get something similar off the ground in Melbourne.

But now, two years later, Jane’s business is consistently making close to $10K net profit every month (That’s after paying Jan and everyone else in the business a proper wage of course).

Because Jane knuckled down and dotted the I’s and crossed the T’s, all the boring stuff, and now the business is humming like a well-oiled machine. Everything that can be systemised is, from going to the flower markets, to making the bunches, to marketing, ordering, delivery and payment.

Jane’s customers love her business, the staff love working there, it’s growing steadily and the bank account is building steadily.

Read all about Money, Profit, cash flow and keeping your fingers on the pulse here

Making the competition irrelevant

The competition is irrelevant. Most of them started up and fell over again, or in any case are not heard from again. The ones that are still there are barely hanging in it seems. They haven’t dotted the I’s and crossed the T’s. If anything the competitors have prepared the other markets for the arrival of Jane’s business.

Jane will expand to Melbourne, and then she’ll make sure Melbourne runs like a well-oiled machine and making money, before she opens in Brisbane, and so on.

That’s how you build a Fun Business that sustains you for years to come… Slow and steady… I promise you.

For more resources, and reading on strategies for growing your business follow this link to the first of The 7 Big Questions that all small business owners want answered

#smallbusiness #coaching #funinbusiness #businesspassion #secretstosuccess #CompetitionIrrelevant

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One Minute Business Tips

Why It’s OK Being Small in the Business World

There is such a thing as ‘big enough’

sonic sight enough growth I read a great article today on the Leaders in heels blog by Geoff anderson from Sonic Sight, this is the link to the full article: http://leadersinheels.com/business/advice-small-business-owner-okay-small

Geoff explains how he’s come to the conclusion that it’s right for him to keep the business small. not to grow any further.

And Geoff’s business is exactly right for him, it allows him to spend enough time with his family and to engage with the other things in his life that mater to him and hence his business sustains him (and all of those he cares about) for years to come.

I love Geoff’s insight and I believe more business owners need to have this insight. I’ve written about it in The Ten Truths for Making Business Fun as well, because I think we have been doing ourselves a big dis-service to follow the mantra: “Business must grow or else it dies”. t’s simply not true.

I’m not qualified to make judgements about the world of large business, although I do believe that our worldwide focus on growth at all cost must come to an end really soon or there won’t be a planet left, but I do know about small business and in small business there is simply no rationale to keep growing and growing… just because.

We need to grow exactly to the point that serves us and sustains us and makes Business Fun… but no further. And where that point is, will be different for everyone, and that’s how it’s supposed to be in small business.

So ask yourself… what’s “Enough” for you?

Answer that question for yourself and for your business and your life will never be the same again… I promise you.

And thanks Geoff Anderson for those great insights

Reverse Mentoring

old dog

Teaching old dogs new tricks

old dog

Find a mentor… At your daughter’s high school

I just read an article in .the Sydney Morning Herald about “reverse mentoring”. The idea is that especially in respect of modern communications and use of social media, senior (and older) business people should acknowledge that they might be be wise and experienced, but largely clueless about the developments in social media and new forms of communicating and marketing. One acknowledged… the article suggests to take on a mentor who is half your age to move forward.

Being a very old and experienced and wise business person myself(!), I found myself nodding my head when reading the article by Sylvia Pennington. I’ve turned 56 and although I pride myself to be reasonably up with the times, I’m often confronted with my limitations in understanding how younger generations communicate and want to be communicated with. Having a Facebook account and taking the odd photo of my breakfast might rate as being on the cutting edge with my friends, but there is a whole world of new opportunities out there that I barely know about, let alone understand.

So yes, I’ve taken on a 25 year old marketing assistant, who works with me every week. She patiently tries to explain what she does for me every now and then, and I patiently try to understand, and somehow we muddle through and the partnership seems to work… Even if I do wonder why anyone would want to spend time on the latest app/widget/thingo/craze that she directs me to.

But it’s a good point that Sylvia makes. Just because we’ve been around for a while, doesn’t mean we know it all… we may know something about something, but we know nothing about a whole heap of stuff… ask for help from the people that do… people the age of your kids … or younger. You can be sure of one thing, it will drag you out of your comfort zone… and that’s always a good thing… I promise you.

 

Business the Simple Way

lemonade kid

The Basics…

selling lemonadeKeep it Simple Stupid

In the next 6 months I will be writing a series of articles called ‘Business the Simple Way’… Marketing the Simple Way, Planning the Simple Way, systemisation the Simple Way, etc etc.

I’m inspired to talk about ‘Business the Simple Way for a couple of reasons.

  • I think we tend to get overwhelmed a lot in business, because we make things a lot more complicated than they need to be.
  • Seth Godin was in Sydney the other day and he always inspires me to simplify things.

Seth Godin

One of Seth Godin’s golden quotes is this one:

To be successful in business you only have to do two things:

  • Do great work
  • Make sure lots of people know about it.

seth godin Seth Godin is spot on…as so often… That’s really how simple it is.

But be careful. Don’t confuse the word ‘Simple’ with the word ‘Easy’. They’re not the same at all.

Einstein said (well allegedly anyway, more quotes are attributed to Einstein than any man could possibly have fitted in a life time, along with Mandela, and Churchill): “Make things as simple as possible but no simpler.”

So lets make business as simple as possible but no simpler.

At its most simple level, business is the process of obtaining something for a certain cost and then selling it to someone for an increased cost.

Don’t confuse that statement with the Purpose of business, but it does define the process of business. So if we want to practice business the simple way, we must constantly ask ourselves how we can stay as close as possible to that simplicity.

The simplest way

What is the simplest way to run the process of business?

I believe there are 10 key questions you need to answer as simply as possible to do Business the Simple Way:

  1. Why does my business exist? (Purpose)
  2. How do we make money in my business? (Business Model)
  3. Where are we going and how are we going to get there? (Goals and Planning)
  4. How do we manage our numbers? (Financial management and measurement)
  5. How do we find our customers and help them buy our stuff? (Marketing and Sales)
  6. How do we produce and deliver our stuff? (Products and services)
  7. How do we run the business as a consistent machine? (Management)
  8. How do we ensure consistency and continual improvements in our products or services (Systems and Processes)
  9. How do we find and keep the best people? (Staff)
  10. What does it mean to for me to run a business? (Leadership)

I think that the work of the business owner is to be constantly looking for the simplest answers to those ten questions.

John’s supermarket

To illustrate what I’m talking about, lets have a look at one of my favourite customers and how simply he answers the ten questions for his business.

supermarketJohn owns a small chain of supermarkets, and those of you who have read my books might recognise him from one of the business bedtime stories.

  1. The simplest answer that John has for question 1 is this: We make it easy for our customers to access a range of quality foods
  2. At question 2, John says: We make money by buying our many lines at wholesale prices and selling them at retail prices. We have extensive and ongoing negotiations with our suppliers to get the best prices from them so that we can maintain our margins while being competitive with other supermarkets.
  3. We want to have established 50 stores in NSW by 2030 and we plan to get there by expanding 1 store at a time and not moving forward until the last addition to the stable is profitable.
  4. We are always measuring and comparing against benchmarks across the whole of the business.
  5. We are established locally and each store operates in a small local area. New customers come to us by word of mouth because of how easy it is for them to access a large range of quality foods.
  6. We constantly look to find new suppliers with interesting and high quality foods that are not available in the major supermarkets
  7. We hold regular staff meetings and performance reviews at all levels and our systems are all geared for regularity and repeatability
  8. We have created manuals and systems for all jobs in the business and train staff in the use of the manuals. We have regular meetings to explore opportunities for improvement.
  9. My staff and customers know that we are always on the lookout for great new people to join the team. I pay my people well and give them lots of challenges and opportunities to develop. I also offer opportunities for career advancement within the business. I do not hire external managers, rather I train and promote from within.
  10. I see myself as a servant of my people. It is my role to give them the greatest opportunities to grow, develop and do well.

Your turn

I want to help you answer those questions yourself in your business. So in the series of articles and videos that you’ll receive in the next months I will explore each of the ten questions with you.

In the mean time… why don’t you pick one of the ten questions and see how you can answer it in the simplest way possible?

I’d love to hear what comes up for you, please email me with your thoughts and comments?

Social Media Marketing

trust

trust Build Trust and Watch your Profits Soar.

I bet no one has ever done business with you unless they trusted you at least at some level.

A different level of trust is required to engage with a financial planner than to buy a litre of milk from the corner store, but without trust there is no business.

social media tree Well thought-through social media marketing can be a highly effective strategy to build trust but don’t take the lazy route, because you’ll waste your time and your money.

After years of dabbling in Social media marketing myself and putting the odd toe in the water only to pull it out again a little while later I have finally joined the social media marketing world properly or at least more properly than I ever have before.

I’ve taken on a social media and online marketing guru to drag me along kicking and screaming and make me use the various media they way they are meant to be used. (I’m sure she despairs of me often)

Star-rating

The reason I am finally stepping up is that I can see that trust is becoming more and more important and people expect to be given the opportunity to learn to trust a business before they are prepared to spend any money at all. We expect to be referred by friends, we expect to see testimonials from other consumers and we expect to see star-ratings or similar.

The other day a friend of mine asked his community on Facebook if anyone knew a good electrician. (so as not to end up with an electrical situation like on the photo below!!)

qualified-electricians Several people chimed in straight away, and my friend was able to ring an electrician who came recommended by 5 separate people more or less instantaneously.

I see this phenomenon happening all the time now. I myself gained a client in a similar manner a few months ago.

In 2014, we are simply not going to spend money with anyone unless and until we trust them.

What that means is that social media marketing campaigns (or any other single channel marketing campaigns) on their own are doomed to failure.

The electrician and Facebook

There are two approaches that work… the first is how the electrician approaches it, a three step approach:

1)    Do Great Work: Create incredibly happy customers, Raving Fans (and he does, look him up if you need an electrician in Sydney, David Jones Electrical)

2)    Build Community: Build a community on social media. Make sure that you are connected with all your happy past clients and business referral partners.

3)    Engage: Build your community by posting stuff that is of interest to you, for no other reason than that you think it’s fun or interesting or useful. When the call comes, you’ll be front of mind… just like the electrician.

Taking this approach consistently means David gets regular new business through Facebook and other media. David is front of mind with any of his past clients whenever anyone mentions the word electrician, anywhere, be that in Facebook or at a dinner party or in a cue at the local supermarket. The friend who asked for an electrician in Facebook was bombarded with testimonials and as a consequence his trust level for David was so high, he didn’t even look for a second quote for his work.

You cannot achieve that kind of result with advertising or with single-track social media posting campaigns. You have to carry out all three of the steps above.

Give away your best stuff

good free stuffThe second approach can work in a more single-track kind of way: It still relies on building trust but in a different way. As I said people will not spend money unless and until they trust you. The other way to build trust therefore is to prove to your customers that you can be trusted, by giving a lot of your stuff away for free… Your best stuff even. The stuff that is worth real money and that is truly useful. If you give people a big bunch of really good free stuff, you will also slowly start to build trust.

But be aware, it can take a long time and you have to be ok with giving away all this stuff.

So my own marketing strategies are now based on a combination of the two approaches. I do great work, I am building a community with my Raving Fans and my referral sources, I engage by sharing stuff I find interesting regularly and I also give away lots of free stuff (my books, my webinars, a lot of my resources and even one-on-one sessions). I even encourage my clients to give away my stuff to others too.

Pay per click

Notwithstanding the increasing focus of the social media giants to monetise their platforms and the fact that it is getting harder and harder to talk to your customers without paying for it in ‘pay per click’ type of advertising, it is still possible to carry out those two marketing strategies for free. It is possible but in in fact it is starting to become unrealistic. The time required to run these types of campaigns mean that you should look into hiring an expert to do it for you, especially if you want to base your trust building strategy around giving away stuff for free.

Hence I engaged my despairing marketing guru.

So when you are thinking about your marketing campaigns, especially your online and social media campaigns, ask yourself how you can best build trust real meaningful trust. and make that the corner stone of all of your strategies and plans.

It’s a wonderful experience when it works … there is nothing more fun than having customers knocking on your door saying they want to buy from you… because they trust you.

It feels great… I promise you.

Do you need more tips, advice or training in Social Media Marketing?

What other support are you most looking for as a business owner. I’d love to know! Let’s have a chat and an obligation-FREE discussion on how I can help you.

How Can I Help You Survey

Happiness, Positive Thinking and Acceptance

enough

Let’s all go out and find some Happiness

Happiness: Positive thinking and other nonsense

How would it be if I told you that a lot of what you believe will make you happy in life, actually does the opposite?

keep calmHave a look at the following statements:

  • Do what you love and the money will follow.
  • The only things that hold you back are your beliefs
  • Positive thinking is easy.
  • Focus on the negative and that’s what you’ll get.
  • Your self-talk creates your success.
  • Your thoughts determine your outcomes
  • Happiness is a choice (so is unhappiness)
  • What goes round comes round
  • We only use 10% of our brains. (Trust your intuition to know what to do for success)
  • Success (wealth, happiness, love) isn’t a finite resource; everyone can have it.

If you focus on those statements every day, you will live a happy, fulfilled, rewarding life, right?

WRONG!

They’re all nonsense and harmful to your happiness.

The statements are myths and they set us up for feeling like failures.

The Happiness Myths

I will refer to them as the Happiness Myths from here.

The Happiness Myths have been popularised in books and seminars on ‘Positive Thinking’ and by movies such as ‘The Secret’.

I’m sad to say that I have done my share of perpetuating the Happiness Myths as well.

Goals at Harvard

harvard A classic example of one of the Happiness Myths is one that has been quoted as Gospel-truth for 40 years by anybody with a pulse in the personal development world. The myth is that people who set goals and write them down are much more likely to be successful in life than those who don’t, and that there was an important study done at Harvard University in the late fifties that unequivocally proved the Goal Myth.

The problem is: the study never took place.

Scarcity v Abundance

Another Happiness Myth that I adhered to enthusiastically as well for some time, is that what gets in the way of our success, wealth and happiness is our belief that there isn’t enough to go round for everyone. It’s called ‘The Scarcity Mindset’ and the myth is that we have to learn to embrace ‘The Abundance Mindset’ instead, if we want to live happy lives.

It is a nice myth, but sadly, no amount of Abundance Mindset thinking is going to change the circumstances of a starving farming family in The Horn of Africa.

In our turbulent lives, it is tempting to believe the various Happiness Myths. It would be so comforting to believe that if we simply set a goal, and change our self-talk, we will allow happiness and success into our lives. Who wouldn’t want to believe such dreams?

But they are dreams, and I believe it’s time for us to wake up. Belief in the ‘Happiness Myths’ actually sets us up for feeling deeply unhappy.

Making sense of our lives

Being happy in life has a lot to do with how we make sense of our lives. People who are generally happy tend to explain bad outcomes in life as results of their actions (I have done something bad); as opposed to people who tend to explain the same outcomes as a personal failure (I am bad).

This is how it works: If you decide that you have done something wrong, (‘I have to admit that I didn’t handle that argument with my wife very well’) then you are generally able to manage your diappointment, because you can decide to do better next time (‘Next time I am simply going to remind myself to take a deep breath and count to ten before…’). failure But if you believe that you personally are bad at something, it means you will always struggle to get a better outcome (‘Here we go again, I am just so bad at relationships’).

If you subscribe to the Happiness Myths, you will want to explain life as a result of your thinking, your attitude and your self-talk; If you are not successful in your business, the little voice on your shoulder will say: ‘See you don’t think right’.

  • If you are single, it’s because you are so negative.
  • If you are not as wealthy as you would like to be, it’s because you don’t want it badly enough.
  • If you didn’t win the running race, it’s because you don’t believe in yourself enough.
  • If your children struggle with drugs it means you haven’t been a good enough parent.

In other words: When things don’t go the way you’d wish them to go, it is your failure as a person that is the cause of it. And that is the perfect breeding ground for unhappiness in life.

The Secret to Happiness

So if positive thinking in all its many guises doesn’t lead to happiness… what does?

The answer is this:

Being happy means “accepting what happens”… The search for happiness is a ‘Contradiction in terms’. There is no activity you can undertake that will lead to greater happiness. Happiness can only come from accepting what is.

Acceptance is the key.

I mentioned the ‘Scarcity Mindset’ and how we are told that embracing the ‘Abundance Mindset’ will turn our lives around. It won’t… what will turn your life around (and mine too) is to learn to accept ‘Sufficiency’.

enough When we learn to accept ‘Enough’ in all aspects of our lives; when we accept that we are good enough, clever enough, thin enough, beautiful enough, good enough parents, rich enough and we let go of all the striving to make us happier… That’s when happiness comes-a-calling.

So… What I’m going to do is sit under a tree this afternoon and accept that a bird might drop something on my head.

What are you ready to accept?

Oh and by the way… Please don’t accept everything I wrote 

About Roland Hanekroot and the Small Business Masterminds Webinars

Roland Hanekroot is the founder of New Perspectives Business Coaching and the author of “The Ten Truths books for business owners”

To support small business owners take the first steps to building a business that sustains them for years, Roland runs a series of regular webinars called The Small Business Masterminds Foundation webinars. There are three different Foundation webinars, on Time Management, The Purpose of Business and How to have more Fun in Business.

The foundation webinars are totally free and you can find out more and register for the next one here: http://smallbusinessmasterminds.com.au

 

masterminds

The Market: Finding Your Niche

we love customers

What, who and where is my market?

register for webinar

What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business. 

In this series of articles and associated webinars and workshops, by Roland Hanekroot you will learn the basic concepts and get the knowledge you need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.

Format

The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of New Perspectives business development programs, to suggest some small simple “First Steps” you can take straight away to put the knowledge into action.

 3 Questions

marketIn the second of these articles we’ll look at Your Market and ask:

What, who and where is my market?

Most of us business owners find ourselves in a market by accident. Not many of us start from scratch in a new market. We’ve either taken an existing business over from a previous owner or we’ve started our business doing something that we happen to be particularly good at and hence we’ve already had a couple of clients and a market from day 1.

Consequently we roll along doing more of what we’ve always done. Our recipe for success is our belief in ourselves and a vague notion that we’ll be able to do it better than the other guys, somehow.

The things that don’t set us apart

we love customersThis situation is equally applicable to someone with a carpentry business, as it is for a mortgage broker, a café or a fashion store. When asked what sets them apart, most business owners will say 3 things:

1)   We give great customer service

2)   For a great product

3)   At a great price.

And I have no doubt that they do, believe that they do, or at least strive to.

There are two problems with these statements though:

1)   The three statements are not special enough, they don’t offer enough value (Customers expect good service, good quality and good price from everyone… as a minimum)

2)   And most importantly, all your competitors say exactly the same thing.

Who is the cheapest?

If you and your competitors make the same promise, the customer will make a decision on price because it is the easy factor to compare on.

In small business, there is nothing worse than being forced to compete on price, because there is always someone who is prepared to do it cheaper. You cannot build a long-term sustainable small business based around being the cheapest.

Find a tight niche

One of the most effective solutions to this problem is to find a tightly defined niche market that is either not serviced at all or is underserviced.

If you can find a niche market for your product or service that has few or no other business operating in, you can set out to own that niche and dominate it. Dominating a niche is a recipe for building a long-term sustainable business, like no other.

3 Niche questions

There are 3 questions you can ask to help you find such a niche:

1)   Who does not currently use my product or service but might?

2)   What are all the factors that we and all our competitors already compete on with each other?

3)   On which factors are none of us competing?

I am going to work through a couple of examples to demonstrate how to go about finding a niche and stepping into it.

The carpet cleaners

Re question 1: ‘Who does not currently use my product or service, but might?

carpet cleaner Assume you own a carpet cleaning business and your town has heaps of carpet cleaners and they all offer more or less the same thing so that 75% of the inquiries you get from prospective new clients revolves around the question: How much do you charge per room? The question drives you mad, because you are only just making ends meet as it is and having to be the cheapest all the time just isn’t viable.

One day you decide something has to change and together with your wife you start to have a look through your database of clients and jobs from the last 3 years. You are not sure exactly what you are looking for yet, but you hope to find a specific category of client or job that is either more profitable than the rest, or more fun to do, or is easier, or all of the above.

After an exhaustive search over many evenings, your wife mentions that she’s come across a few big 21st birthday party cleanups and an idea starts to form.

21st birthday parties

You decide to create a special offering and expertise in preparation and cleanup before and after big parties. Especially 18ths and 21sts can be massive messy affairs and a lot of anxiety goes along with them. How about offering a package that includes preparing the carpets for a big party with a protective spray application and then coming back the day after the party to do a thorough clean to make the house smell like new again?

A special package like this is actually not offered by anyone in your city and addresses a great need.

John and Mary’s Party Cleaning is born… a unique product and offering at a price level that you can make good profits on and best of all, prospective customers cannot compare on price.

Your business and your life will never be the same again… I guarantee it.

Kelvin’s bike shop

bike shop Now lets have a look at the other “niche questions”. This is a story about a different set of circumstances as experienced by Kelvin who owns a bike shop.

This story relates to questions 2 and 3: What factors are you and your competitors already competing on and what factors are you not competing on:

Selling bicycles is not easy because there is a lot of competition from many different sources. There are other bike shops all around the city; there is the ever increasing number of ‘Big Box retailers’ such as Big W and Kmart and the internet is increasingly impacting traditional retail models as well.

Kelvins shop was still doing just ok but the trends were not looking good at all, and pressure on his margins was constant.

Just at this time Kelvin came across a quote from a bikeshop owner in America, Chris Zane: “The only difference between our competitors and ourselves is the service we provide”

The fish pond

fishpondKelvin realised the obvious truth of this statement. There is effectively no difference between the bikes sold by Kelvin or any of his competitors or the pumps or the bike-shoes. Kelvin and his competitors were all fishing in the same pool trying catch exactly the same fish and the number of fish in that pond was diminishing. The only way forward was to create a new pond and attract enough of the fish away from the old pond to be able to enjoy the fishing again.

So Kelvin set about changing his approach to business completely. First Kelvin looked at all the factors he and his competitors fought over (price, range, convenience, friendly service, speed of delivery, connection with major sporting heroes etc)

Then Kelvin looked at what other factors there were that nobody competed on yet.

The insight that Kelvin had was that the greatest opportunity for his business, lay in creating long term customer loyalty through delivering truly extraordinary service, and absolute peace of mind.

Lifetime free stuff

For example, Kelvin implemented a life time free flat tire repair; Kelvin offered ‘no questions asked’ replacement guarantees for any bikes and products sold if you were dissatisfied with the product for whatever reason. Kelvin taught his staff that from now on the word NO was out of bounds and no request was to be rejected.

A couple of years later, Kelvin moved his store to a new location with three times as much space.

Kelvin created his own fishing pond and he was able to dominate it, year after year.

This is the topic we will be talking about at the March Small Business Masterminds ‘live’ workshop as well as the Masterminds online webinar, both on 10 April. If you would like to attend either the webinar or the workshop, go to http://smallbusinessmasterminds.com.au 

Take the first steps:

As mentioned in the opening paragraphs of this article, I will suggest some “First Steps” actions you can take right away, that will get you started on implementing the topics and principles we discuss: The resources page is here: http://tiny.cc/marketlpage

Download the article from the resources page: Blue Oceans and Empty Swimming Pools”, by Roland Hanekroot.

In a notebook ask yourself the first of the 3 niche questions above.

In your notebook ask yourself the remaining 2 niche questions above.

Download and print the “find your niche” worksheet here, and complete the worksheet.

Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne is the Bible on this topic of finding a niche. It is a great read, link on the resources page http://tiny.cc/marketlpage

About the author and the Mastermind sessions

Roland Hanekroot Roland Hanekroot is a business coach who works with Small business owners to help them have more Fun in their businesses and build businesses that sustain them for years to come. Roland is also the author of “The Ten Truths books for Business owners” (more about the books here: http://thetentruths.com.au)

Every month Roland Hanekroot runs a business development workshop as well as a webinar called “The Small Business Masterminds” more information here and to register for the next webinar or workshop, follow this link: http://smallbusinessmasterminds.com.au/ The first time is free.