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
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’.
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.
In 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
This 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?’
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
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
Kelvin 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
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.
So in part 2, I am going to tell you how to go about creating more fun in your business…
As much fun as you can have with your clothes on.
There are 4 major steps to creating more fun in your business.
Step 1: Purpose, Passion, Profit
The first step is called “The Hedgehog Principle” as defined by Jim Collins, author “Good to Great” and other classic business books.Jim Collins writes in “Good to Great”, that a sustainable, long term profitable business must be about having absolute clarity about three questions:
What can we be the best in the world at?
What are we absolutely passionate about?
How can we create a profitable business model around that
In nearly 10 years of coaching small business owners I have come to see that it absolutely starts with those three questions. And most importantly… none of those three are optional; you must answer 3 out of 3…
Step 2: People
Business is about people. Many businesses proudly state that their staff are their most important assets yet they rarely walk the talk, because it is a feel-good statement only… and besides the reality is actually much more stark:
People ARE your business, and your business only gets to make profit at the discretion of your people.You will only make profit in your business if your people let youSo your people must be completely on board with those three questions above, Purpose, Passion and Business Model. And that means they have to be communicated with and involved in the answering of those three questions.
Step 3 Goal setting
The Chesire Cat in Alice in Wonderland said it best: “If you don’t know where you are going, my dear, any road will do.”
So the next step is Goal setting: What are our long term, medium and short term Goals of the business? And again you must get high level involvement from your people.
The most powerful business Goal setting process I know is:
Start with a big long term vision, 10 to 25 years out (often referred to as a Big Hairy Audacious Goal, the BHAG)
Next create a 3 to 5 yr target that is a big step on the way to achievement of the BHAG
Then create a Goal for the current year. The current year goal is the first step on the way to the Target and the BHAG
Finally break the 1 yr goal up into monthly milestones
Again, goal setting in a business can have an incredible impact on the business as whole, but only if all the people in the business are engaged in the development of the Goals
Step 4: Measurement
The last step is measurement and keeping track of what goes on, on a daily, weekly, monthly and annual basis… Measurement is what I’ll talk about in the next newsletter
Those 4 steps are what it takes to start to create REAL FUN in your business.
How does that sound? Feasible or is the little voice on your shoulder having a field day?
Ok… As I said, In the next newsletter (May) I will go into a bit more depth on the topic of measurement and then in the June newsletter I will show you how all of it comes together to creating REAL FUN and how we can even become really clear and exact about exactly how much fun we are actually creating, so that we can ask ourselves: “Are we having Fun yet?”
Have a go yourself…
In the mean time … I’d love you to start thinking about those first 3 steps I talk about in this article:
How many of the steps have you taken some action on already
Which of those can you take a small step with tomorrow or next week…just a small step
Maybe have an informal chat with some of the key people in your business about the hedgehog principle?
You might be surprised how even a few conversations on these topics might start to introduce a little bit more fun in your business.
Call me if you’d like to explore how I can help you have more FUN in your business.
Or come to the next Small Business Masterminds workshop… click here
1001 Business Bedtime stories… Laura had a fashion label… Truth 2
Here follows another one of the “1001 Business Bedtime Stories”. Every one of the “1001 Business Bedtime Stories” come straight from the New Perspectives Small Business Bootcamp, stories of business and courage and they illustrate an aspect of one of Ten Truths. You might recognise some of them from your own experience. This story is about Truth num 2: “A Business without a plan achieves everything in it”…
Once upon a time… a long long time ago in a country not unlike Australia… Laura had a fashion label…
Laura had a little shop in Sydney and a fashion label and a small dedicated band of followers for her unique brand of office fashion for successful corporate women. Laura’s business was 4 years old and although it was gratifying to see the same customers come back season after season for her latest lines and to know how happy her customers usually were when they left her shop, Laura felt strongly that there was a wonderful opportunity for her to grow the business and bring her unique designs to a larger audience, but she just didn’t know where to start.
“Should I get involved in some social media, or maybe I need to take the plunge and open a shop in the cbd or should I look for a partner in Melbourne or knock on the door of Myer, and how will I finance an expansion, and can I continue to manufacture in Australia, and what if I am not good enough to manage more staff and various localities, and is the market in Perth the same as the market in Sydney, and what if Cue designs simply decides to knock off my designs, and if I grow will I lose the loyalty of my customers” etc etc etc
“There are so many what-ifs and so many different priorities to choose from, how do I know where to start?” was the constant refrain in Laura’s head.
Laura was stuck in a classic decision paralysis loop.
Working in The Bootcamp with me, Laura came to realise that the only way to cut through her dilemma’s was to face her lack of confidence of business planning head on and get to work with me to develop a thorough Business Plan, in a form that worked for her.
So she did… and it took a lot of courage… but Laura got under way and together with me she started creating a big mind-map in which she put all the dilemma’s and questions and start to work systematically to order them, prioritise them and answer them.
The mind-map evolved to a series of small one page documents for different aspects of the business and a time line with projections for different stages of the business development.
From there Laura simply started to work progressively through the plan, and every time another question or dilemma came up she could go to the plan and the mind-map, and find a place to house the question. This simple process of planning allowed her to be able to focus on the immediate step ahead without being afraid that she will forget something crucial.
Making this step to getting involved in an appropriate level of consistent planning is the one thing that started to shift Laura’s business into a new realm.
Now, 1.5 Years later, Laura has opened a second shop in Sydney. The planning process has helped her understand that her opportunities in the short to medium term are not in the CBD, nor in large scale production Off-shore, but in a series of small unique shops in specific inner city suburbs like Balmain and Mosman, followed by similar expansion in Melbourne and other major cities in Australia.
Laura is looking forward to the next 5 years of consistent controlled growth and building a loyal national following of her label.
And Laura and her business lived happily ever after… The End
Ask yourself… Where will you find the courage to make Profound things happen in your Business?