Small Business Techniques

Improving Operations Booklet

by Tom Gray | on Aug 26, 2014 |  Comments

Improving operations is the surest way to start growing profits, because you have control. Now there’s a new 60 page PDF booklet with 12 articles covering

  • How to find and mine opportunities for better quality and efficiency.
  • Examining processes, scheduling, and suppliers to remove waste and boost throughput, so every sale generates the optimal margin.

What’s the Payoff?

Use this booklet to learn

  • To recognize low-risk opportunities to boost profits.
  • Techniques for managing quality.
  • How to turn bottlenecks into opportunities.
  • Process mapping to save wasted time and money.
  • Techniques for staffing/scheduling.
  • How to measure suppliers and reduce cost of materials.

Order the low-cost PDF download at Purchase Books | BUSINESS TECHNIQUES BOOKS

Get Some Training Too!

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

The Improving Operations workshop is scheduled for Wednesday, November 5 at COD, and Tuesday November18 at GSU, 8:30 AM to 12:30 PM. To register, visit Business Techniques Institute | Get Better @ Business

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about opportunities and techniques to boost quality and efficiency, managing bottlenecks, process improvement, staffing/scheduling, and managing suppliers, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

How Do I Start A Business?

by Tom Gray | on Aug 25, 2014 |  Comments

Thinking about starting a business? Get started right!

To learn some proven and practical techniques, attend Small Business Basics: Entrepreneur and Opportunity from 8:30 AM to 12:30 PM on Wednesday September 10 at the College of DuPage SBDC, or on Tuesday September 23 at Governors State University.

You Will Learn and Practice These Techniques:

  • Assess your entrepreneurial readiness using RESPICT
  • Develop your Business Model
  • Analyze your opportunity
  • Decide your target profit
  • Choose a legal form of organization
  • How to use your numbers to improve results
  • Step-by-Step Roadmap to Launch

As a special thank-you for participating in this first of a series of 12 small business workshops, you’ll get a 20% off the normal fee, paying only $88, plus receiving the supporting 60-page booklet for free. Just sign up at the link below, and I’ll email you the booklet with 16 articles on “starting right.”

To register, visit Business Techniques Institute | Get Better @ Business

Why Attend a Workshop?

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, veteran consultant and author Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about your own readiness to start a business, fleshing out your idea in a Business Model, organizing your business, using your financials, and the sequence of steps to launch, or do you know all that already? Why not invest in a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

Using Your Business Model

by Tom Gray | on Aug 20, 2014 |  Comments

“If it’s a good idea today, it was a better idea yesterday” is time-honored advice that captures the faster pace of today’s environment built on interconnected resources and web speed.

The Business Model concept “favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional ‘big design up-front’ development,” writes Steve Blank in “Why the Lean Startup Changes Everything,” Harvard Business Review, May, 2013.

The idea is to use hypothesis, customer feedback, and trial-and-error to get progressively closer to a workable, viable business structure. You set up your hypotheses, and then get out of the office to find out what advisors and customers think of them. Mr. Blank goes so far as to define a start-up as “a temporary organization in search of a repeatable, scalable Business Model.” The more specific Business Plan can wait until you know more.

Evaluating Your Hypotheses

After developing the hypotheses on your “canvas” (see prior article), you assess and fine-tune them. Some questions might be:

  • Does your idea fit society’s trends, or are trends working against it? Use “DPEST” to remind yourself what trends to consider: Demographic, Political/Regulatory, Economic, Sociocultural, and Technology.
  • Does the market seem big enough and willing to pay your price? You may wish to check some library databases for market size.
  • What are the Key Success Factors for anyone to create a viable business around this idea? For example, if you want to create a business based on using Army surplus Ducks for land/water tours, you’ll need a large enough (tourist?) market near a river, lake, or ocean, a source for  vehicles, a facility for vehicle storage and maintenance, permits, entertaining drivers, and a local theme.
  • What other resources will you need, which ones do you have, which can be obtained from others?
  • Are your major cost centers worth it? Do they add strategic value? If not, can you outsource them?
  • What are your goals for market acceptance and profit? Is this Model likely to meet them?

Get Advice

After modifying your first view based on this evaluation, talk to others about the idea. The value of their input exceeds the risk of disclosure. Start with trusted friends, but move quickly to asking people who have already launched a start-up. Corporate managers may have good ideas, especially about risks, but recognize they tend to be planners and operators rather than entrepreneurs.

  • Find out what appeals to them about the idea. Would they buy the product? Do they know someone who would? Ask them to describe that person – they could be your target market.
  • What risks do they see? Can you find ways to reduce those?
  • How would they improve the Business Model?
  • Go to potential customers, and ask the same questions.

Test a Prototype with Customers

  • Develop a “minimally-viable” version, or even a demo, and ask potential customers to try it out.
  • Listen to their feedback! Don’t be defensive, and don’t explain. You won’t have a chance to explain to every buyer, so just listen to their reaction and then decide whether improvements are crucial before launch, or can be deferred to Version Two.

The most common mistake made by entrepreneurs is failure to get market feedback soon enough. The Business Model approach is designed for “fast failure” and continuous learning, so you can quickly “pivot” by making changes to deal with market perceptions. Now get out there and listen!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

Managing People Booklet

by Tom Gray | on Aug 19, 2014 |  Comments

What if your employees always did the best they could? How can you help them get there? Now there’s a new 60 page PDF booklet with 20 articles covering how to do that.

Veteran consultant Tom Gray will explain techniques to manage the way you manage your employees, so you’re both happy with their performance. Learn from years of experience how to boost results with better people management.

What’s the Payoff?

Use this booklet to learn

  • Motivating and demotivating behaviors
  • Compensation principles and techniques
  • How managers interpret and influence employee performance
  • How to set up employees for success
  • Goal-setting techniques
  • Understand the issues in special cases: hiring, separation, family employees

Order the low-cost PDF download at Purchase Books | BUSINESS TECHNIQUES BOOKS

Get Some Training Too!

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois.

The Managing People workshop is scheduled for Wednesday, October 29 at COD, and Tuesday November11 at GSU, 8:30 AM to 12:30 PM. To register, visit Business Techniques Institute | Get Better @ Business

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about motivation, compensation, blaming behaviors, setting up employees for success, goal-setting, hiring, and managing family employees, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

What is a “Business Model”?

by Tom Gray | on Aug 13, 2014 |  Comments

Understanding the idea of a “business model” starts with recognizing it is different than a “business plan.” A Plan is a specific roadmap with measured projections – you “plan the work, then work the plan.” Declare success when the actual results meet or exceed projections on time.

A Model is a collection of ideas that might work – hypotheses are not the same thing as a specific roadmap. A Business Model is a note to yourself telling you what promising ideas you need to test. You can create a Business Model in an hour. Testing it will take months. After that, you can write the Business Plan, but you may already be launching your business when you do!

Here is the “Business Model Canvas,” with a few modifications from the version presented in “Why the Lean Start-Up Changes Everything,” by Steve Blank, Harvard Business Review, May, 2013.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Your Business Model will be a short outline with these three sections: Value Proposition, Customers/Revenue, and Operations/Costs. Within each segment, briefly answer the questions under each heading. When you do, you will have fleshed out your idea with all the support needed to make it  into a business: target customers, distribution channels, marketing concept, pricing, key production processes, supply chain, and major costs.

Value Proposition

The Model answers the question “How will this Idea make money?” It starts with meeting a customer need rather than building a product in search of a market. The Value Proposition goes beyond the raw product to capture the bundle of services needed to make it a real solution for customers. The concept of “minimum viable product” shows a bias for action, to be followed by improvement based on customer feedback.

Customers/Revenue

Customer focus continues as you imagine the target customer segments, understand how and where they buy today, assess competitors, and select your own differentiation and customer support.

The Revenue Model defines the pricing concept. What unit are you charging for: membership, a subscription, a package of units and services, hourly services, advertising, usage, or something else? Your pricing tactics will set your price level. You’ll consider competitor prices, customer willingness-to-pay based on value received vs. alternatives, and the price level for different packages of physical products and services in your product line.

Operations/Costs

The Key Activities questions identify what your company must do to make the offering a reality. This will include those processes crucial to providing the value. For example, we must do these operations with those materials so that we have that kind of quality output. Maybe we have to develop a key software component, and so on.

The Resources section looks at Key Success Factors. For example, we will have to secure certain kinds of deals with distribution channels and suppliers, and hire a special set of skills. Where will we get them, and what will they cost?

The Partners section focuses on the companies and advisors needed to provide the resources and make the activities happen. This reminds you to focus your own resources on the value you can add, and get the rest from others who specialize in those other functions. Trying to do all the functions yourself creates unacceptable complexity and delay, while draining your own limited financial and management resources.

The summary of major costs provides the priorities for your subsequent analysis. How can you gain these resources and manage these activities to achieve your goals within your resource limits?

The Business Model concept and canvas provide a framework to quickly define a complete business. See the next article for ways to use this thinking to get into the market.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

Sales, Negotiating, and Decision-Making Booklet

by Tom Gray | on Aug 12, 2014 |  Comments

Selling, negotiating, and deciding are some of the hardest tasks for the small business owner. Now there’s a new 60 page PDF booklet with 16 articles covering

  • How to size your sales effort
  • Attract new distributors
  • Make and manage sales
  • Negotiate
  • Make a decision

What’s the Payoff?

Use this booklet to learn

  • How to use the Sales Funnel to “size” the sales effort
  • Distributor considerations in deciding to take on a supplier
  • A few sales techniques
  • Sales compensation techniques vs. behavior
  • Sales support techniques
  • Negotiating techniques
  • Decision-making techniques

Order the low-cost PDF download at Purchase Books | BUSINESS TECHNIQUES BOOKS

Get Some Training Too!

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

The Sales, Negotiating, and Decision-Making workshop is scheduled for Wednesday, October 8 at COD, and Tuesday October 21 at GSU, 8:30 AM to 12:30 PM. To register, visit Business Techniques Institute | Get Better @ Business

Sample Session: Attend “Pricing Right” on August 20

Get a taste of Tom Gray’s small business techniques and his workshop style by attending “Pricing Right” on August 20 at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Lisle, Illinois. Register by calling the Center at 630-942-2600.

The session covers pricing principles, practical techniques for “thinking through” your price decisions, and some pricing techniques such as differentiated pricing, revenue models, shop rates, and promotions. Workbook practice is not provided in this one-hour session, but one-on-one follow-up sessions are available with Tom or the local Small Business Development Center staff.

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about forecasting the sales effort required, attract distributors, selling and managing sales, negotiating, and decision-making, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

Your Idea’s Value vs. Buying Criteria

by Tom Gray | on Aug 06, 2014 |  Comments

Listening to customers is one of the fundamental paths to a product or business idea, but it’s not the only way. Customers may not know value until they see it, and until you tell them how valuable it can be. Twenty years ago, how many customers would have told you their mobile phone had to have a camera? Not many. They just did not associate the two technologies.

Don’t ask customers to speculate on what they would do in a hypothetical situation! Instead, watch and measure customer behavior in the real world. Then listen when they explain why that behavior gives them a benefit.

The reasons for their behavior today go beyond the product itself. Customers behave according to the situation: their location, their circumstances, and how they use the product as part of a larger situation. For example,

  • The convenience of a soda pop vending machine in a park on a hot summer day makes people willing to pay much more per ounce than they would pay to buy the same soda at a grocery store. Accessibility has value.
  • The role of the product in a critical process makes buyers willing to pay more for a guarantee of quality or delivery. Avoiding risk has value.
  • The cost of buying ancillary or operating supplies, such as fuel or spare parts, is part of the larger situation. Structuring your deal to reduce those customer costs has value.

In your search for a valuable solution, look beyond the product to see all the aspects of its use. The value of your solution may lie not in the product itself, but in its availability, its packaging, its lower risk, or ancillary cost savings. “Competitive battles are won by offering innovations that reduce customers’ costs and risks over the entire purchase, consumption, and disposal cycle,” writes Niraj Dawar in “When Marketing Is Strategy”, Harvard Business Review, December, 2013.

For example, Hyundai Assurance offered to take back a car during the Recession if the buyer lost her job. The Redbox vending machine for DVD rental enables impulse purchases and saves a trip to a video store or on-line site. Protection from job loss and saving a half hour trip are not part of the Hyundai or Redbox product itself, but they are part of the value these customers will pay for.

Shifting Buying Criteria

The term “buying criteria” applies to the mental checklist buyers use to decide which product to buy. The list will be narrow, especially for consumer buys, and especially when the unit price is low. Humans are not going to run through fifteen items to make a buying decision. Five to seven is the maximum. For more on buying criteria, see Competitive Analysis | Thomas H. Gray.

Buying criteria are built on the customer’s total situation, including where she buys, where she will use it, and what other costs or risks are linked to that usage. The buying criteria are based on her experience. But what if your solution’s value offers a benefit new to the customer’s experience, something they aren’t even thinking about? How can you make a sale by being better at something that does not matter to the buyer, like a camera in a phone twenty years ago? You can’t. Instead, you must make it matter. You must shift her buying criteria.

Communications are the tool for shifting buying criteria. You must show and tell customers how they benefit in new ways from your valuable difference. You’ll probably use some combination of tactics, such as testimonials, demos, press releases, expert reviews, free samples, presentations at events, and of course advertising in various media.

If your idea relies on a new benefit, one that is absent from buying criteria today, make sure your business model and business plan provide the strategy and resources to change the way customers think about your product category.

Acknowledgement: This article is based on Mr. Dawar’s article cited above.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

Marketing Booklet

by Tom Gray | on Aug 05, 2014 |  Comments

Every business needs to attract more customers, but how? Now there’s a new 60 page PDF booklet with 21 articles covering

  • How to find your competitive edge.
  • Support it with product and pricing tactics.
  • Communicate an attractive offer to the right target market.

What’s the Payoff?

Use this booklet to learn

  • How to use the Competitive Analysis Matrix to find differentiation and create a positioning slogan.
  • Product strategy techniques: design for the experience, augment, bundle, roadmap.
  • Pricing considerations, techniques to think through pricing decisions, and some pricing techniques.
  • How to use the 5Ms to communicate with your target market.
  • How to structure and use a Customer Database.

Order the low-cost PDF download at Purchase Books | BUSINESS TECHNIQUES BOOKS

Get Some Training Too!

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

The Marketing workshop is scheduled for Wednesday, October 1 at COD, and Tuesday October 14 at GSU, 8:30 AM to 12:30 PM. To register, visit Business Techniques Institute | Get Better @ Business

Sample Session: Attend “Pricing Right” on August 20

Get a taste of Tom Gray’s small business techniques and his workshop style by attending “Pricing Right” on August 20 at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Lisle, Illinois. Register by calling the Center at 630-942-2600.

The session covers pricing principles, practical techniques for “thinking through” your price decisions, and some pricing techniques such as differentiated pricing, revenue models, shop rates, and promotions. Workbook practice is not provided in this one-hour session, but one-on-one follow-up sessions are available with Tom or the local Small Business Development Center staff.

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about finding a competitive edge, product and pricing tactics, communications choices, and building/using a customer database, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

How Do I Choose a Price?

by Tom Gray | on Aug 03, 2014 |  Comments

Pricing is the fastest way to grow revenue! Veteran consultant and author Tom Gray will present Pricing Right: Practical Techniques to Design Your Prices in Lisle, Illinois on August 20 at 9:00 AM.

This one-hour session explains small business pricing considerations, techniques for thinking through your price decisions, and selected pricing techniques.

What you will learn:

  • The four most important pricing considerations
  • The six crucial pricing guidelines
  • How to find your Competitive Edge
  • How to calculate the effect of price changes on your bottom line
  • Markup and margins, for original provider, distributor, and retailer
  • Choices for revenue models
  • How to use breakeven analysis to find target revenue and price
  • Differentiated pricing
  • Setting a shop rate and pricing for parts
  • Product line pricing
  • Discounts and promotions

Date and Time: Wednesday August 20, 9 AM – 10 AM.

Location: College of DuPage Center for Entrepreneurship, 2525 Cabot Drive Suite 201, Lisle, Illinois.

To register, call 630-942-2600. Fee is $25.

Tom will also introduce the upcoming series of 12 Business Techniques Institute workshops to be delivered at the same location, as well as Governors State University’s Small Business Development Center, beginning in September.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

Finding the Business Idea

by Tom Gray | on Jul 31, 2014 |  Comments

How many times have you and your friends said “They oughta…” or “There ought to be…”? Ideas for a new business float around like rootless tumbleweeds until they are anchored with an entrepreneurial champion, a bundle of resources, and design to apply those resources profitably. Ideas without execution are merely fantasy.

Even though an idea is not enough to make a business, no business ever started without one! How do people come up with ideas for new businesses? They either spot a customer need they could meet in a different and better way, or they start with a bundle of resources (skills, technology, money, etc.) and look for a customer need they can apply it to.

Method 1: Spotting a Customer Need

The most open-ended way to find an idea for a new business is notice what people do, and imagine a way they could do it differently. Then you ask yourself (and them) some questions. Think of the e-reader (Kindle, Nook) as an example while you consider the questions below.

  • What are people trying to accomplish?
    • Easily-portable reading material.
  • Why? What benefit are they seeking?
    • Portable entertainment without bulk.
  • How do they do it today (in 2005, before e-readers became available)?
    • Buy new or used books at retail stores, or borrow from libraries.
  • What gets in their way?
    • Find time to go to store or library, retail prices, limited selection, bulky format, running out of entertainment, i.e. finishing a book when there is no place to get another.
  • What do they do to get around those obstacles?
    • Buy or borrow several books in one trip; trade books with friends; carry a back-up book.
  • What alternative solutions come to mind?
    • Buy and carry books in a digital format, using a personal reader and internet-based replenishment, from a site with a large selection, especially if digital book prices are less than physical book prices.
  • What obstacles would need to be solved for the alternative to be attractive?
    • See above: large selection of digital books, priced low, accessible online, and low-cost digital reading device with easy-to-read display and long-term power.
  • How could those obstacles be solved?
    • Research
  • What resources would you need to gather to achieve those solutions?
    • Technology developments, author and publisher permissions, wireless network deal, book selection presentation software.
  • Is the market big enough to be interesting? How much would customers be willing to pay?
    • Research!

Once you have answers to these questions, you can imagine a business model to transform the idea into a business!

Method 2: Resources in Search of a Market

A narrower approach starts with a key resource you have. You are looking for customers with a problem that your resource can solve. Imagine you are E-Ink, a firm with a technology using on-line instructions  to change the written display on a special screen that reduces glare so it can be used in all environments. Your first idea was to deploy that technology for signs, so advertisers could update their signs without printing new ones. Now you are looking for a consumer market. All the same questions listed above apply to this method as well.

Your Mental Approach

Your idea search, sometimes called “ideation,” starts with observing how customers meet their needs today. You need to put yourself in their shoes to understand why they do what they do. What benefit are they after, and what obstacles are they solving? Their behaviors make sense to them, and you must find out why they make sense.

Your focus is how to add value to their lives. How can you deliver a greater benefit, or an easier or cheaper way to deliver the benefit they get today. Focus on the customer, not on any pre-conceived solution, product, or technology.

Your solution analysis is structural. You start with the idea of delivering value to customers, and then imagine the pieces needed to build your solution, as if you were building a house. The term key success factors (KSF) can remind you to think about the components of any successful solution. To deliver value to customers, it must provide certain elements better than alternatives and competitors. Then you can imagine several ways to obtain and deliver those key success factors.

Which solution is the best way for you to deliver those KSFs? Consider your resources. What do you have or can you do? Where can you find the missing pieces? With those answers, you can design your solution.

This customer-based structural approach transforms the idea for solving a customer problem into a business delivering value that customers might be willing to pay for. Now you have a business opportunity! You still have many issues to resolve, but you know what value you are working to deliver, and you have identified many of the obstacles you must overcome.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

Financing Booklet

by Tom Gray | on Jul 29, 2014 |  Comments

50% of startups need external financing, and many operating businesses need financing as well. Now there’s a new 60 page PDF booklet with 14 articles covering:

  • Estimating how much financing you need.
  • The requirements of various funding sources.
  • How to select the best fit for your business.

What’s the Payoff?

Use this booklet to learn

  • How to estimate much financing do you need
  • See yourself as a lender sees you
  • Understand SBA loans and Microloans
  • What to expect from lenders if your payments fall short
  • Introduction to angel investors
  • Introduction to crowdfunding
  • How to protect a family investor

Order the low-cost PDF download at Purchase Books | BUSINESS TECHNIQUES BOOKS

Get Some Training Too!

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

The Finding Financing workshop is scheduled for Wednesday, September 24 at COD, and Tuesday October 7 at GSU, 8:30 AM to 12:30 PM. To register, visit Business Techniques Institute | Get Better @ Business

Sample Session: Attend “Pricing Right” on July 23 or August 20

Get a taste of Tom Gray’s small business techniques and his workshop style by attending “Pricing Right” on July 23 or August 20 at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Lisle, Illinois. Register by calling the Center at 630-942-2600.

The session covers pricing principles, practical techniques for “thinking through” your price decisions, and some pricing techniques such as differentiated pricing, revenue models, shop rates, and promotions. Workbook practice is not provided in this one-hour session, but one-on-one follow-up sessions are available with Tom or the local Small Business Development Center staff.

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about figuring out how much you need to finance your business, where to get it, and what terms to expect, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

What’s Wrong with Pursuing Your Passion?

by Tom Gray | on Jul 23, 2014 |  Comments

There’s no shortage of cheerleaders giving advice to business people. One of the most common mantras they offer these days is “pursue your passion.” If you love doing something, they say that’s what you should build your business around.

This always sounded a bit off-target to me, because it doesn’t fit my experience. To make a business work, you spend your time on the business, not on your passion. The success of your business has to become your passion – you love how well you do it, the challenges, and the people. It replaces whatever you were passionate about before.

  • For example, you may love sewing and home décor, but when you start a business on these, you stop spending time sewing and decorating. Your focus is the business: selecting fabrics, choosing designs, exhibiting at trade shows, networking for customers, social media marketing, and financing. You hire people to sew.
  • You may love riding and tinkering with motorcycles. When you start a motorcycle repair business, you don’t have time to ride anymore! What happened to the passion?

Take my own experience after I retired from a corporate career in telecom. I was looking for a business to enter, and followed the advice to pursue my passion. My passion was golf, so I decided to start a golf travel company. Fortunately, I did a business plan first, and soon discovered that people would pay me a lot more for advising them how to manage a telecom company than for setting up golf trips. So I dropped that idea, and started a consulting firm instead.

I was good at consulting on management, and people paid me for the value I offered. In contrast, I may have been a good golfer, but I had no particular skill or edge in setting up golf trips. People would not get much more value from my arrangements than they would from using someone else or doing their own, so the margins were low. My passion for golf did not translate to a golf travel business.

Recently I came across a short article that makes this same point so well that it’s worth quoting in full. The article was by Scott Adams, the Dilbert cartoonist, in the Wall Street Journal (10/19/2013).

“When I was a commercial loan officer for a large bank, my boss taught us…the best loan customer is someone who has no passion whatsoever, just a desire to work hard at something that looks good on a spreadsheet. Maybe the loan customer wants to start a dry-cleaning store or invest in a fast-food franchise – boring stuff. That’s the person you bet on. You want to grinder, not the guy who loves his job.

“For most people, it’s easy to be passionate about things that are working out, and that distorts our impression of the importance of passion…Dilbert started out as just one of many get-rich schemes I was willing to try. When it started to look as if it might be a success, my passion for cartooning increased because I realized it could be my golden ticket. In hindsight, it looks as if the projects I was most passionate about were also the ones that worked. But objectively, my passion level moved with my success. Success caused passion more than passion caused success.

“So forget about passion.”

When I was asked to be the interim CEO for Mooney Airplane Company, I found another group of people who agreed with this analysis. The Mooney is a single engine plane for private pilots, but the company’s owners wanted a CEO who was not a pilot. They said they wanted to avoid the passion of the devotee because it could cause bad business decisions, influenced by the emotional love of flying. They were afraid that passion would make success impossible.

So when you consider your idea for a new business, look first at what you do well, not what you think you love. You won’t have time to do what you love when you’re building a business about it. It will lose its charm, and you may lose your love of it. But most importantly, you have a better chance of success working at something you know you do well. That success will breed its own passion, and then you’ll have two loves rather than none: the one you didn’t build a business around, and the business you built.

Contrary to cheerleader advice, work at something that looks good on a spreadsheet, and that you know how to do. Passion will come as you succeed. You’ll love being a successful entrepreneur!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

Business Planning Booklet

by Tom Gray | on Jul 22, 2014 |  Comments

Ready to write your Business Plan? The most important parts of the Business Plan are the Competitive Analysis and the Sales Forecast. These are also the parts that entrepreneurs have the most trouble with. Now there’s a new 60 page PDF booklet with 18 articles covering

  • Creating your vision of the business
  • Structuring the business plan
  • Target market
  • Competitive analysis, differentiation, and positioning
  • Sales funnel and sales forecast
  • Roadmap to Launch

What’s the Payoff?

Use this booklet to learn

  • Imagining Excellence: a technique to create a multi-aspect Vision for focusing yourself and team efforts
  • The Business Plan format
  • Describing The Market, including Competitive Analysis, your differentiation and positioning
  • Sizing your target market
  • Some techniques for Marketing Tactics – the 4Ps
  • Sizing the sales effort
  • How to develop the Sales Forecast
  • How to describe Organization and Operations
  • Format of the Financials section
  • 30 mistakes to avoid in your Business Plan
  • The sequence of steps to launch

Order the low-cost PDF download at Purchase Books | BUSINESS TECHNIQUES BOOKS

Get Some Training Too!

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

The Competitive Analysis and Sales Forecast workshop is scheduled for Wednesday, September 17 at COD, and Tuesday September 30 at GSU, 8:30 AM to 12:30 PM. To register, visit Business Techniques Institute | Get Better @ Business

Sample Session: Attend “Pricing Right” on July 23 or August 20

Get a taste of Tom Gray’s small business techniques and his workshop style by attending “Pricing Right” on July 23 or August 20 at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Lisle, Illinois. Register by calling the Center at 630-942-2600.

The session covers pricing principles, practical techniques for “thinking through” your price decisions, and some pricing techniques such as differentiated pricing, revenue models, shop rates, and promotions. Workbook practice is not provided in this one-hour session, but one-on-one follow-up sessions are available with Tom or the local Small Business Development Center staff.

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about writing a Business Plan, finding your competitive edge, forecasting sales, and the steps to launch, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

Entrepreneurs – RESPICT Yourselves!

by Tom Gray | on Jul 16, 2014 |  Comments

Every year 600,000 new companies open for business. 30% will close in two years or less, 50% survive five years, and 67% don’t make it past 10 years. The “close” numbers also include firms being acquired, but those are a small minority.

RESPICT

The acronym RESPICT is a reminder of the ingredients needed to be a successful entrepreneur. Investors look for these qualities, abilities, and resources. You should too! Decide if you have them before deciding to start a business.

  • Runway: Expect to be operating at a loss for up to two years, so you need two years’ worth of living expenses in addition to your start-up investment. Think of this as the runway before your venture takes off into positive cash flow.
  • Experience: You have the best chance for success if you have worked in this industry or operation previously. You need to understand your new industry, the operations to make your product, and how to manage a business and its people. You don’t get that second-hand. True, many entrepreneurs start a business without experience in managing one. But how do you think their failure rate statistics compare to those of experienced managers? Experience improves your chances.
  • Skills: Financial management and marketing are the two skills usually missing when a small business fails. You can contract for people to do your books and your marketing, but you cannot delegate the owner’s two major responsibilities: making sure you have enough cash flow, and understanding your customers’ needs and buying behavior.  Unlike experience, you can develop these skills after launch, but don’t wait too long. A business owner must buckle down to understand and manage their numbers, or the business will fail.
  • Personality: Much has been written about the personal traits of successful entrepreneurs. Two of the most important ones are adaptability and persistence in the fast-changing chaos of a start-up. Second, the ability to simplify and to make good and timely decisions are the only way to make sense out of chaos and move the business forward. Third, you must like to work with people. Finally, you must be able to envision and explain a step-by-step process, project, and procedure. The audience is yourself, investors, employees, suppliers, and customers. Here’s a test: try explaining the steps involved in tying a shoe.
  • Idea: You must have a viable business idea with enough value to enough customers that you can make enough profit. Several future articles address generating and assessing the business idea.
  • Cash: Businesses fail when they run out of cash. You need to know how to estimate cash flow and cash needs, have enough to invest your share (25%?), and be able to get the rest from others.
  • Test: Your plan should provide for selling the idea to prospective customers as early as possible. This is how you learn to improve its value, and how to explain that value. Sell with a prototype. Launch with the minimum viable product. In your planning, allow time to develop improvements before sales begin to grow.

You have a chance for success if you can put together a “RESPICT-able” package of abilities/skills/experience/resources and a good idea with a plan for testing.

Entrepreneurial Mindset

The other key ingredient for start-up success is the “Entrepreneurial Mindset.” The word “mindset” means a certain way of looking at the world. Here is how entrepreneurs look at the world and its challenges:

  • They think structurally. They can see the pieces or building blocks that make a business viable. They look at an industry and at their own business in terms of the Business Model: value proposition, customer buying criteria, competitor positions, distributor roles, supply chain, production processes, revenue model, and cost centers. Future articles explain the idea of the Business Model.
  • They apply and connect known elements (e.g. technology, materials, delivery systems) in new ways. For example, phone + camera + browser + memory + touch-screen = iPhone. None of these technologies were new, but the combination was new.
  • They use what they have and reach out to others for the missing pieces without needing to own them.
  • They’re willing to recognize when they’re wrong and adapt.
  • They’re self-confident, persistent in the face of obstacles, and energetic but not foolish. They recognize risk rather than ignoring it, and find ways to reduce it. One technique is moving forward in stages, adapting to feedback at each step. Another is contracting for resources rather than spending their own capital and effort to do it all.
  • They have a support network of business-savvy people, and reach out for their advice constantly.

If you have RESPICT and the entrepreneurial mindset, you have a good chance to succeed in starting a business. If you don’t, find the missing pieces before moving ahead!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

Small Business Basics: Entrepreneur and Opportunity Booklet

by Tom Gray | on Jul 15, 2014 |  Comments

Thinking about starting a business? Get started right! Now there’s a new 60 page PDF booklet with 16 articles covering

  • What it takes to be an entrepreneur.
  • How to develop your idea into an opportunity.
  • Basics skills for running a business.

What’s the Payoff?

Use this booklet to learn

  • How to assess your entrepreneurial readiness using RESPICT
  • Develop your Business Model
  • Analyze your opportunity
  • Decide your target profit
  • Choose a legal form of organization
  • How to use your numbers to improve results

Order the low-cost PDF download at Purchase Books | BUSINESS TECHNIQUES BOOKS

Get Some Training Too!

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Suite 201, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

The Small Business Basics workshop is scheduled for Wednesday, September 10 at COD, and Tuesday September 23 at GSU, 8:30 AM to 12:30 PM. To register, visit Business Techniques Institute | Get Better @ Business

Sample Session: Attend “Pricing Right” on July 23 or August 20

Get a taste of Tom Gray’s small business techniques and his workshop style by attending “Pricing Right” on July 23 or August 20 at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Lisle, Illinois. Register by calling the Center at 630-942-2600.

The session covers pricing principles, practical techniques for “thinking through” your price decisions, and some pricing techniques such as differentiated pricing, revenue models, shop rates, and promotions. Workbook practice is not provided in this one-hour session, but one-on-one follow-up sessions are available with Tom or the local Small Business Development Center staff.

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about your own readiness to start a business, fleshing out your idea in a Business Model, organizing your business, and using your financials, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

 

Measure to Manage Supplier Performance

by Tom Gray | on Jul 09, 2014 |  Comments

“If you can’t measure it, you can’t manage it,” says one old saying. Look at your own business: are there any suppliers whose failure to perform could ruin your business? These are called strategic suppliers. They are important to you, so you need to manage them. Managing starts with measuring.

Since your business depends on these key suppliers, it’s worth the effort to think through what you expect of them. You know you’ve thought it through when you can express those expectations as objective measurements. These enable you to easily monitor their performance. When a supplier could “tank” your business, you need such early warning signs! Chris Gray calls these metrics “Vital Signs.” See DOES YOUR SUPPLY CHAIN MEASURE UP?

What Measurements?

To make the best use of your time, select only strategic suppliers, and select only the measurements that seem to have critical impact on your business. Choose some from this menu.

Incoming Supplies:

1. Accuracy: Percent of ordered items filled as ordered on first attempt.

2. Timeliness: Percent of ordered items received by requested due date and time (just-in-time).

3. Cycle Time: Number of days from requisition to receiving the delivery.

4. Overall Quality: Percent of ordered items arriving without a defect.

5. Impact Quality: Assign a weighting to all items for high(3), medium (2), or low (1) impact on your business, and recalculate 1, 2, and 4 above.

6. Value of Returns: Dollar value of items returned for any reason (e.g., defect, delivery does not match order, too late to be used).

Shipper of Your Finished Products:

1. Accuracy: Percent of items shipped that were actually delivered.

2. Timeliness: Percent of shipped items arriving by committed delivery date and time.

3. Cycle Time: Number of days or hours from pickup/drop-off to arrival at customer or distributor’s receiving department.

4. Overall Quality: Percent of shipped items damaged in shipping process.

5. Value of returns: Dollar value of items returned or written off for any shipping-related reason (e.g. damaged, never received, too late to be used).

How to Use Measurements to Manage

1. Record results: Use a system or spreadsheet to record performance, so all the performance observations in the month can easily be summarized to a monthly number.

2. Based on the past few months (or on gut feel!), decide the level of performance you need. Set a threshold number for acceptable performance on each measurement.

3. Imagine a progressive set of actions you’ll take if results fall short, and then select a trigger for each action. For example:

  • The first level is to share results with the supplier and ask for a planned remedy.
  • The second step, if the results fall short for two more months, might be to ask for different terms, such as a rebate in months when the threshold is not met.
  • A third step, if the results still fall short regularly, might be to launch a search for new suppliers, with deal terms that include the measurements and penalties for shortfalls, called a “Service Level Agreement.”

4. Meet with the supplier to explain how you will measure their performance. Agree to share the results. Agree on a process for remedies. Now you are not just measuring; you’re managing!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

How to Grow Your Small Business

by Tom Gray | on Jul 08, 2014 |  Comments

You spend all your time working IN the business: dealing with customers, employees, suppliers, lenders, and local officials; resolving issues; and managing cash. How much time do you spend working ON the business? Immediate concerns suck up the time you know you should spend on fundamental change!

If you do find the time to think about how to change your business, you can find zillions of articles and ideas on the Internet. Many are fads. Most are too general to help. You don’t know who or what to trust. You may give up, and go back to solving today’s flare-ups, because at least you can control those.

Two Integrated Solutions: Booklets and Workshops

Veteran consultant Tom Gray now offers the trustworthy help you’ve been looking for.

  • Small Business Techniques Booklets: a series of ten booklets explaining practical and proven simple techniques, each focused on a single business growth issue.
  • Business Techniques Institute – Chicagoland: A series of twelve half-day workshops for startups and existing small businesses, where personal explanations of these techniques are combined with the opportunity to practice applying them to your own business problem.

Booklets

Each 60 page booklet gathers 15 or so short articles on a single topic from Gray’s blog and books. Each article explains a technique for solving small business problems encountered in Gray’s 40 years of experience in business, consulting, mentoring, and teaching in-business MBA students.

Many of these articles have appeared in Gray’s two books, along with articles on many other business topics. Now, the Small Business Techniques booklets focus on a single topic, so small business owners can use a single source document to home in on a particular business problem. Reviews show how useful these techniques can be:

  • About Business Techniques in Troubled Times

“This detailed book provides tools, techniques, and strategies for every aspect of a small business. There is real content in this book. It isn’t a philosophical diatribe about the theory of small business success. It provides tactical, specific ideas for fixing and improving processes and policies. There’s even a section about family businesses!” -Diane Helbig, Seize This Day Blog

  • About Business Techniques for Growth

“Proven Practices for Small Business Growth: Tom knows his stuff. Turnaround specialist Tom Gray’s real world experience shines through. I found at least 10 big ideas in it for any company’s small business toolbox. Ideas like how to start your strategy from a vision, decide if your business is worth doing, choose which growth lever is right for you, and more. What I especially liked about the book is the fact that it covers a lot of ground. Too many books, spend an entire book on one idea. I like the fact that this book takes us through the myriad of challenges and solutions for growing your business. It’s years of experience in a box and I’m surprised to find it all together within a single bound. What a nice surprise!” -JD Meier, Sources of Insight.com

The Small Business Techniques booklet topics are

-        Basics: Entrepreneur and Opportunity              – Business Planning

-        Financing                                                                 – Marketing

-        Sales, Negotiating, and Decision-Making         – Managing People

-        Improving Operations                                           – Growing Revenue

-        Turnarounds                                                            – Selling Your Business

For more information and to order, see http://www.businesstechniquesbooks.com/

Workshops: Practice-Oriented and Personal

For many of us, the written word is not enough. We want to be shown, then practice, and then chat in person about how to do it better. To meet these needs, Tom Gray created Business Techniques Institute – Chicagoland, a group of 12 face-to-face half-day workshops, partnering with local organizations like Small Business Development Centers, SCORE, and local colleges.

Each workshop provides slides and a workbook to apply the techniques to your own business problem during the workshop, and uses one of the booklets as its text.

Small business owners and managers can attend one workshop or several, depending on the topics they want to explore and the problems they seek to solve. The first series begins in September 10 at the College of DuPage’s Center for Entrepreneurship, 2525 Cabot Drive, Lisle, Illinois. The second series begins two weeks later at the Illinois SBDC at Governors State University, 1 University Parkway, Room C3300, University Park, Illinois.

Register in response to an email from a partner, or visit Business Techniques Institute | Get Better @ Business. Workshop summaries and the calendar can be seen there as well.

The BTI-Chicago workshop topics are

-        Basics: Entrepreneur and Opportunity       - Competitive Analysis and Sales Forecast

-        Finding Financing                                             – Marketing

-        Sales, Negotiating, and Decision-Making    - Leading a Culture of Service

-        Positive Communication Techniques            - Managing People

-        Improving Operations                                      - Growing Revenue

-        Turnarounds                                                       - Selling Your Business

Sample Session: Attend “Pricing Right” on July 23 and August 20

Get a taste of Tom Gray’s small business techniques and his workshop style by attending “Pricing Right” on July 23 or August 20 at the College of DuPage Center for Entrepreneurship, 2525 Cabot Drive, Lisle, Illinois. Register by calling the Center at 630-942-2600.

The session covers pricing principles, practical techniques for “thinking through” your price decisions, and some pricing techniques such as differentiated pricing, revenue models, shop rates, and promotions. Workbook practice is not provided in this one-hour session, but one-on-one follow-up sessions are available with Tom or the local Small Business Development Center staff.

Why Not Try It Out?

Want to grow your business? Do you know how? Is there something you could learn about marketing, planning, operations, or managing people, or do you know all that already? Why not invest in a booklet and a workshop? For a few dollars and hours, your business could take off to a new level!

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com.  For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

How Do I Choose a Price?

by Tom Gray | on Jul 07, 2014 |  Comments

Pricing is the fastest way to grow revenue! Veteran consultant and author Tom Gray will present Pricing Right: Practical Techniques to Design Your Prices in Lisle, Illinois on July 23 at 9:00 AM.

This one-hour session explains small business pricing considerations, techniques for thinking through your price decisions, and selected pricing techniques.

What you will learn:

  • The four most important pricing considerations
  • The six crucial pricing guidelines
  • How to find your Competitive Edge
  • How to calculate the effect of price changes on your bottom line
  • Markup and margins, for original provider, distributor, and retailer
  • Choices for revenue models
  • How to use breakeven analysis to find target revenue and price
  • Differentiated pricing
  • Setting a shop rate and pricing for parts
  • Product line pricing
  • Discounts and promotions

Date and Time: Wednesday July 23, 9 AM – 10 AM.

Location: College of DuPage Center for Entrepreneurship, 2525 Cabot Drive Suite 201, Lisle, Illinois.

To register, call 630-942-2600. Fee is $25.

Tom will also introduce the upcoming series of 12 Business Techniques Institute workshops to be delivered at the same location, as well as Governors State University’s Small Business Development Center, beginning in September.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

 

Staffing Strategy and Scheduling People

by Tom Gray | on Jul 02, 2014 |  Comments

You know how many people you need, but how do you fill those requirements: hire permanent or temporary employees, whether full or part-time; build and store inventory in low months; work overtime, outsource, or even accept backorders in peak months? Once you decide this staffing strategy, then you can move on to scheduling people.

Gather Your Inputs

Good decisions require good information. Gather some numbers, survey the market, and set some policies before deciding how to staff.

Numbers:

  • How much does hiring cost: advertise, interview, background check, training hours for instructor and student, low productivity for the first few weeks/months, higher loss rate for new hires?
  • How many people can you hire in a month? Limits include your HR staff and instructor training time available, and the ability of the production team to absorb new members.
  • What does it cost to store a finished item in inventory? Interest expense on the delay in gaining sales revenue is probably the only variable cost, but you may also have to provide more storage space and warehouse personnel.
  • What does it cost to work overtime? Note that often employee benefit costs do not increase for overtime hours. What is the limit on overtime, assuming excess overtime causes absence and quality/rework problems? My advice is to not exceed assume 20% of regular time, or 8 hours per week, for six consecutive weeks.
  • What does it cost to outsource work? Are there suitable suppliers? What do they charge, and what is the shipping cost? Will you incur other costs to deal with them? Any union isues?

Market:

  • Availability of outsourcers?
  • Availability of other employers for employees feeling stressed by overtime?
  • Prevalence of overtime at other employers? Do employees count on some level of overtime to make ends meet?
  • Will your customers accept backorders for deliveries in peak months, or will they go elsewhere?

Policies:

  • When there are more employees than work, will you give them the opportunity to voluntarily accept an offer to go home early without pay?
  • What level of certainty do employees expect about their scheduled hours of work? Can you change schedules every week, or do they expect to have the same hours and days off for months at a time?

Select a Strategy

Having gathered this information, you can select a staffing strategy. Most companies end up with a mixed strategy. They decide not to hire and fire according to monthly demand (“chase strategy”) due to the cost of taking on and training new people. They also decide that working the same hours regardless of demand (“level” strategy) is too rigid and expensive.

A mixed approach employs enough people to meet demand in the lowest month, and stretches to meet peak demand. Some stretch techniques are limiting off-line nonproductive hours, overtime, extending hours of part-time people, and/or hiring temporary workers. If materials are not a major cost element, a few more people can be employed to make extra product in low months, so that inventory is available in peak months.

If non-paid excused time is an accepted tactic, the number of permanent workers can be a little higher, but note that benefits costs apply whether or not the employee goes home unpaid. Outsourcing is not a good match for seasonal peaks because outsourcers do not like peaks and valleys either.

Part-time employees are an excellent safety valve, especially if their hours can be extended without affecting benefits. In addition, these people can be an excellent source of speedy replacements for departing full-timers. However, the downside of part-times is weaker communications, weaker cultural integration with the full-time workforce, and higher loss rates as they find full-time work. The same drawbacks apply to weekend-only workers.

Develop the Schedule

The art of scheduling is to balance the needs of customers, employees, and cost control.

  • Customers want the product or service without waiting. This can cause scheduling more people than needed for immediate demand. Solution: build planned “ready-to-serve” idle time into the forecast of people required (see previous article).
  • Employees want job security and a stable schedule so they can plan their lives. This creates the potential for too few employees at peak days or hours, and too many at slow times. Solution: use a stable schedule for most employees, and provide flexibility with voluntary unpaid time, part-timers who can extend their hours, and overtime.
  • The company wants a perfect match between demand and workers at every hour. This can result in scheduling too few people, relying on “stretch” techniques to meet bubbles of demand. Solution: make a weekly forecast of hourly requirements for each day, using records of past daily and hourly demand. Adjust that demand upward at times when customer waiting experience shows that too few workers were available, because these shortages artificially reduced recorded demand. Then adapt the weekly schedule of offline time and part-timers to cover peaks and valleys within the week.

This approach blends a stable long-term schedule with active weekly/intra-day staff management. It becomes more important for both cost control and customer service as the business grows larger.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

How Many People Do I Need?

by Tom Gray | on Jun 25, 2014 |  Comments

Balancing customer service and production level while controlling staff costs is an issue for every business, large and small. It’s an issue because it’s important for key results (customer and employee retention, revenue, expenses, and profits) yet doing it well requires predicting the future. You must anticipate both customer and employee behavior! Other than that, it’s easy!

Forecasting Production Hours

Every solution for planning people requirements involves forecasting the future volume of business and the amount of work an average employee can produce. This tells you production time required. You should forecast each month separately, to recognize seasonal peaks and valleys. Your business could even require a weekly breakdown in the most variable months, such as November in retail. Later, when it comes to scheduling staff, you’ll consider whether volume of business on any particular day is significantly higher or lower than the week average (e.g. Monday may be 110% of average weekly requirement). But stick to a monthly forecast for now.

Refer to your records of demand and productivity to decide:

  • Current demand growth vs. same time last year, and vs. the last few weeks.
    • If work-time per unit varies by type of unit, you may want to make three separate forecasts, one each for big, medium, and little units
  • Expected growth for the next 12 months, based on above or other inputs.
  • Today’s employee work-time needed to produce the average demand element (unit, widget, order, task).
    • If work-time per unit varies by type of unit, you may want to make three separate forecasts, one each for big, medium, and little units.
  • Expected change in that work-time per element for the period you are forecasting. For example, consider a new machine, or a change in staff’s average experience level.

Forecasting Non-Productive Hours

The next step is translating production hours required into people required. No, you don’t just divide by eight hours to find number of people required. Just look in the mirror, and you’ll realize people are not productive all the time! Unlike robots, employing a person involves planned off-line time (e.g. scheduled breaks and lunches, training, meetings, vacations, holidays), unplanned unavailability (absence and unscheduled breaks), and on-line “ready-to-serve” time to make sure someone is available so that incoming customers do not have to wait too long.

  • For planned off-line time, consider your policies. For example, a company may expect 10 days of vacation, 10 holidays, and 12 days in training/meetings (about 2 hours per week), which sums to 32 days or 12% of 260 workdays in a year (52 weeks x 5 days).
  • For a service business, add some level of idle time while employees are on-line, so someone is available for the next customer without excessive waiting. This applies if idle time is not already built into your work-time estimate. First, decide on your target level of customer waiting time. If they leave without buying due to the wait, will they come back later, or buy elsewhere? Then estimate how much on-line idle time is needed to meet that target. 10% is a minimum, or 26 days per year.
  • For unplanned off-line time such as absence, consider your experience. Maybe that uses up 3% of payroll time, or 8 days per year.

Forecasting People Needed

To find the number of people needed, combine production time required with your forecast of nonproductive time per employee, and then divide that by scheduled hours per employee to find “equivalent full-time” (EFT) people needed. Later, you may decide to meet some of these EFT needs with two part-time people each.

  • Total nonproductive time in this example is 32 + 26 + 8 days = 65 / 260 = 25%.
  • To find EFT people required assuming eight hours per day without scheduled break/lunch, divide production hours required by .75 (that is, 1.00 – .25 nonproductive in this example). Assuming you needed 100 production hours in the average day, you need 125 payroll hours, or  16 EFT.
    • Note the arithmetic here. You divide by productive hours by (1 minus nonproductive % of total). You do NOT multiply productive hours by 1.25. If you did that, you would be 5 hours (one person) short.

Knowing how many people you need per month is the first step in deciding staffing. The next step is deciding how to fill those requirements: hire permanent or temporary employees, whether full or part-time; build and store inventory in low months; work overtime, outsource, or even accept backorders in peak months. See the next article for Staffing techniques and for Scheduling.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business, certified as a Turnaround Professional (CTP), Business Development Advisor, and SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. See www.tom-gray.com. For Tom’s new book Business Techniques for Growth: More Tools for Small Business Success, and its predecessor Business Techniques in Troubled Times: A Toolbox for Small Business Success, see http://www.businesstechniquesbooks.com/

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