Look Outside October 28, 2009
Posted by petemcd in Business, Goal Setting, Sales, Strategy.add a comment
Is there anyone standing outside of your door, just dying to do business with you? I doubt it.
When I started in sales long ago I was called me into the company owner’s office on the first day I reported for work. Here’s the brief conversation:
- Owner: “Pete…welcome. We’re glad to have you on board. Do you see anyone standing outside of our door, just dying to come in and do business with us?
- Me, glancing at the front door to the offices: “Ummm, no sir.”
- Owner: You have to go out and bring in the business. Here are your car keys. Have fun.”
It was that quick. I got the message loud and clear. Get out there and make your mark, make it happen. Business is nothing if you’re not bringing in the sales, whether it’s the direct sales force model that so many other businesses use or if you use resellers or independent agents or reps. Sales must be brought in and every owner and sales manager is responsible for making that happen. Companies should be sales focused first and foremost.
A business best practice is to develop business strategic planning which is centered on marketing & sales. It starts with knowing your market and then hiring the best people you can to represent your company. Without a specific market to go after, you are aimlessly wandering in the wilderness. Without the best people hired you will just be an average player, or maybe a non-player.
Herein lies the two problems with many smaller companies: they haven’t defined their market and they do a poor job of hiring people in the sales and customer touch areas. This means they are highly ineffective in customer acquisition and retention (customer retention should mean you have high customer satisfaction ratings). The wrong kind of business or customer is pursued and brought in and the people doing the pursuing are not ideal. There is a revolving door of sales people and customer service people and the company ends up in a low growth or no growth mode.
So, ask yourself if you’ve really defined the exact market you want to play in. Look back over your years in business and ask whether the human being you hired for sales worked out very well for the business. If the answer to either of these isn’t a resounding YES, then you owe it to yourself to develop a well thought out marketing and sales focused strategy and to develop a system or process for hiring and growing a top notch sales team. If you don’t know how to do this then take the initiative to seek out the best advice from experts such as consultants or best-selling authors.
© 2009 Peter E. McDowell PERFORMA Business Development
Different View/ Better Results
pete@performabusdev.com – email me to request getting my e-newsletter!
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I’m sorry, your product is no longer economical August 28, 2009
Posted by petemcd in Business, Marketing.1 comment so far
I read an interesting article in the front section of the WSJ yesterday, by Ann Davis and Russell Gold: U.S. Biofuel Boom Running on Empty. It made perfect sense to me. It’s another example of the lack of solid business strategic planning and business best practices.
The article states the following-
The biofuels revolution that promised to reduce America’s dependence on foreign oil is fizzling out. Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board. Biodiesel, a crucial part of government efforts to develop alternative fuels for trucks and factories, has been hit hard by the recession and falling oil prices. The global credit crisis, a glut of capacity, lower oil prices and delayed government rules changes on fuel mixes are threatening the viability of two of the three main biofuel sectors — biodiesel and next-generation fuels derived from feedstocks other than food. Ethanol, the largest… and the article goes on.
Here’s why it makes sense. Every business in every industry must have the following: a legitimate and real market for a product or service (the market has a real need for the specific product) and one that economically makes sense. Products and their inherent benefits or solutions to problems will make sense economically when people demand the product and there are not other less costly alternatives.
This market never made sense to me. It’s a good example of government push and industry hype (usually these two combine to be a joke). Now, here’s a nice little tid-bit that most people forget about ethanol: it takes thousands, if not millions of acres of corn (so far, the most common source) to make even a small dent in the energy market. There is not enough acreage available in the U.S. to grow corn for all of its possible uses, especially including a huge shift to corn converted into ethanol as a major fuel alternative.
In Washington state, there was an article in either the Seattle Times or now defunct Seattle P-I about a year ago that reported on and analyzed the new ethanol plants coming on stream in the state. It talked about the large investment capital and the projected output and the need. I was astounded by two things- (1) as far as I can recall, there was no mention of and or analysis of potential global economic scenarios (what I call Risks or Threats) that might derail this venture (2) there was mention that just to fuel the state of Washington it would take something like two entire states of Iowa (I’ll admit that my facts are probably not exact, but you get the idea). Let me tell you, there is not a lot of corn in the Northwest. You are going to have to bring your corn resource in from somewhere else (probably on a diesel fired truck or train!).
You all might remember the stress on the corn markets with all this hype when the commodity was pushed up to unrealistic highs and had the negative effect on corn food products (the tortilla price run up in Mexico is one example, a run up that hurt the poor who use the product as a prime food staple). Ahh, so many instances of unintended consequences.
Be clear that I’m not picking on the biofuel industry. I am calling attention to the point that your business can wither away or die quickly if you have not done your homework on your market and included a deep SWOT analysis, especially the Weaknesses and Threats. Most marketers are optimistic about potential, so they spend most of the time on Strengths and Opportunities, because those are growth oriented and full of exciting possibilities. You cannot invent a new market or a new option in a market without fully understanding all of the holes in your plan and the things that can derail you, the ‘what ifs’. A business best practice would be to give high weight to these areas of Weaknesses and Threats. What is out there that could economically kill your business, maybe even before it gets started?
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
email me to request getting my e-newsletter!
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Green Shoots August 5, 2009
Posted by petemcd in Business, Strategy.2 comments
I don’t know about you, but I think this phrase referring to the economic recovery is not only overused, it’s not true either. Call me a curmudgeon, but we’re a long way from getting out of this hole. Green shoots? Maybe…it’s a short spring as far as I can tell. Don’t believe me? Just have a brutally honest conversation with people you know who are employed. And have the same conversation with those who are not. I’ve had a number of these over the past few days and things are not pretty. In fact, things are pretty scary. The unemployment numbers will play a heavy role in the recovery rate for years to come. Growth will be very slow and incrementally small.
OK, so if that’s where we are, what can you and I do? We can grow our own green shoots. We can look for ways to change the soil our business is in and go a new way. There was an interesting interview in the Wall Street Journal that I read the other day with Terry Lundgren, the CEO of Macy’s. He is very clear this is going to be a long, tough slog. He’s also very clear on the need to change the company’s strategy and offerings. Macy’s is not staying put with the strategy they had a short while ago.
To repeat a thought expressed previously in this blog, there are always winners in tough times. Winners figure out ways to weather downturns and they usually do it by changing strategy. They may add services or features to their offerings, they may acquire a business in the same market to grab market share, they may acquire a company to gain access to an entirely new and more profitable market, they may leverage their intellectual capital to invent a new product & business, and so on.
For you to be a winner today you have to change the way you do things and I don’t mean small obvious changes. You must put to use a business best practice, one of reinvention through innovation. Certainly, if you’re in a very narrow, specific business this can be challenging. You have assets that you need to utilize. The assets may only have application for one market. So think about this: is there intellectual capital or expertise in the value chain you have in place that can be applied elsewhere? I was in the packaging and printing business for years. Big plants, big equipment, specific end user profiles. What else did we have in those businesses that could have value elsewhere? People who know and practice lean management and quality processes, people who are experts in project management, people who are graphically and conceptually creative. There are a lot of businesses who can use this kind of talent.
Focusing on innovation should be a major part of your strategy. You must look at your business and ask a fundamental question like this: what business are we in today that is giving us the results we’re getting and what business must we be in to get different results? I’ve always liked the old analogy about the company that sells drills and drill bits. Are they selling the tools or are they selling the result of the use of the tools, the hole. They are selling the hole. They are selling what the tools do for the user. What are you doing for your users? Are there users out there that can use your expertise, the expertise that delivers a clean, precise, quickly drilled hole with no waste and does it cheaply?
I’m still passionate about my work- working with business owners to develop a marketing and sales driven company, one that has continual growth in sales and profits. I see continual growth as the way to long term prosperity for employees and wealth building for the owner(s), the risk takers. What I try to deliver to owner clients is getting them to see their business differently to get these better results. However, growth isn’t the mantra right now. Survival is the mantra and it’s tied to cash flow. Without cash flow a business stops. So, I’m revamping my work to make sure that a business’ overall strategy has a cash control component that is aligned with the never ending need for bringing in customers. There are a lot of components to cash control and healthy cash flow, but I’m focusing on just a few. I am changing my messaging and my work process.
What can you change to grow your green shoots?
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
email me to request getting my e-newsletter!
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
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Profit- a dirty word? July 22, 2009
Posted by petemcd in Business, Culture.add a comment
OK, a bit of a rant today. With all of the noise coming out of Washington these days, you’d think that profit is evil. If you own a business or are very into the business that you work in it’s a no brainer that profit is not evil. It’s a requirement, an outcome of business best practices. With no profit sooner or later you are not in business. Possibly later, because your cash flow can pull you along for a time, but eventually the cash well runs dry.
I get tired of the assault on the business community over profitability. The questions of how much profit is ‘fair’ or how much is ‘too much’ galls me. Competition usually has a way of managing back profit to reasonable (meaning, specific industry benchmarks or norms) and sustainable levels within time. Unfortunately, there have been a few bad apples at the Fortune 1000 levels that have soured the perceptions of running a profitable business and distributing the rewards of such to owners and employees. Rewards come in many ways, from hourly wages, salaries, benefits, stock options, bonuses, commissions; just to name a few.
Another thing I get tired of, from the Washington beltway crowd, the vast majority of whom have never run a business or been in private enterprise their entire career, is the politically convenient attack on certain industries as having ‘windfall profits’. These people have no clue what business best practices are, the kind that actually allow you to make a profit. No one has adequately defined windfall profits. Just what is one? How much in real dollars or as a percentage of sales is a windfall profit? No one can ever give you an answer for a very simple reason- they don’t have one. They’d rather be an attack dog because the sound bite opportunity is too good to pass up.
Let’s take the standard or favorite whipping boy, the oil industry, and specifically Exxon. In the past few years, every major business magazine and business newspaper has published an article on this industry and this company. If you actually take the time to examine the profit performance as measured in percentage of revenue, their net profit percentage, they (the industry and company) are smack dab in the middle of the industrial pack, and for ROI also. They also spend more dollars per revenue on CAPEX and R&D than most industries or specific businesses. Why are they attacked? Simply, because they are BIG and the numbers reported are BIG. These are huge companies with thousands of employees, huge revenues and huge profits. Funny isn’t it, how in 2008 no one said anything when their profits were down due to the huge drop in oil prices and the corresponding gasoline consumption by consumers who elected to drive fewer miles? My message would be this- don’t buy into politicians pontifications. Do your homework when it comes to understanding the numbers of business and specific industries.
By the way, when it comes to windfall profits (if you can define it), guess who has some of the best return on their investment into an industry? Our politicians. Both parties. Many come into Washington with moderate net worth and years later with a net worth in the multi-millions, all while voting themselves nice pay increases and ever broadening benefits packages every year. And, with the only real risk being one of not getting re-elected. Wish I could be in their shoes…controlling my own pay and benefits. Oh, did you see the report in the last week or two about these people in Congress having a special investment fund that allowed them to have a net return of 25% for 2008, a year when most everyone on the planet went backwards, with many seeing their entire nest eggs wiped out? How do we get into their fund?
Starting, owning and eventually running a business is a very risky venture. People should be rewarded from profits for the risk taken. Business people should have every opportunity to produce an outrageous profit as long as they are law abiding, treat their employees and customers properly and provide products and services that solve real problems or provide real benefits. The problem isn’t profits. The problem is always humans and sometimes you get humans who behave in ways that are not acceptable in society. The vast majority of business people I know and have interacted with for years are good, hardworking people who are trying to get ahead. They are people who have stepped up and taken the risk to develop a company that can provide employment and benefits for many.
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
pete@performabusdev.com
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
Connect with Pete on biznik, Contribution Networking Party, Eastside Entrepreneurs, Facebook, Konnects, Linked In, Plaxo and Twitter.
