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 unifying theory of 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.
The purpose of this article is to outline 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.
I hope you find value in “the 8 C’s of small business management”
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. Ask questions like; do I need the company car that I current drive? Am I wasting money on coffees? Do I over-order stationary? These are small details and we haven’t even discussed the big cost drivers yet, but 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)
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? Do you have a mechanism so that information can be passed upwards? Charles Dunstone of the Carphone Warehouse group famously said that if you’re looking after the customer and looking after the people who look after the customer you should be all right.
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. Henry Ford said “Competition is the keen cutting edge of business”, Walt Disney remarked that he “couldn’t operate without competition”. These were men that knew their markets and knew the importance of competitor analysis in order to get better.
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”. It’s rare that a product or service sells itself. If people don’t know you exist how can they buy from you? Go back to the costs principle. If you save £500 a year on trimming expensive coffees (or something similar) that’s £500 that you can spend communicating a message, that done right will produce a return on investment for the business. Always be communicating. Even a weekly blog will give you presence and is a cheap but effective communication with your customers. Do you have all your customers email details? Are you talking to them? Do you optimise every touchpoint that you have with your customers?
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. For example Don Pepper and Martha Rogers revolutionised business thinking by suggesting that profits could be maximised by selling more things to fewer people. Is that your business? Maybe you want the mass markets as your target? Regardless of what you want to do, you still need to be thinking business in a focused manner with a goal of emerging with clever tactics that will allow you to grow. Scattergun approaches do not work. You must be clever with what you do and run with it.
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.
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. If something sounds like easy money it’s probably not, it just means that the person making that money makes it look easy by investing huge amounts of their concentration and focus to it. 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.
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. For example it’s almost impossible to compete on all of marketing’s 5 P’S. Selling a blue chip product and competing on price is both difficult and dangerous, if you are a low cost- low margin offering, then aside from price it’s difficult to compete on the other 4. 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.
There we have it. Eight fundamentals for all small businesses. 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 8 tips are essential for all businesses but they will not remotely guarantee success without being competently applied to your business.