Weekly Business Idea

June 23, 2017 – What is Valuable to My Customers?

Posted on | June 23, 2017 | No Comments

Main Idea:

Do your customers love dealing with you?  Do you get a lot of griping about the cost of your product or service?  Do your customers refer other friends to your business?  Do you know why they buy from you versus your competitor down the street?  If you purchased an item that originally lists for $150 and you are able to purchase it for $75, are you buying a $150 item or a $75 item?

Expansion of the Idea:

I just finished reading a business analysis of Ford’s disastrous launch of the Edsel.  Based on the article’s analysis, I think Ford did a tremendous job of marketing the car.  They spent a large amount of money doing some very creative marketing.  The problem was that between when they originally designed the car and when it went to market, people’s taste changed and Ford didn’t know what was valuable to its potential customers.  They could not add any value because there was no way to change the fundamental offering.

Our customer’s perception of value is a critical item to understand.  Our products and services are worth different things to different people.  If you doubt this, think about a $100 bill.  What would you have done when you were a teenager to earn $100?  What would you do now?  Is there a big difference in the number of hours you would work to earn $100?  Compare your answer to what someone like Warren Buffett might do to earn that same amount of money.  Who would work harder to earn that money?  There is a big difference in hours worked for something that is objectively worth the same amount.

The only way to begin to understand what your product or service is worth to your customers is to start thinking like them.  Maybe you can go to their offices or where they spend a lot of time.  You can ask them questions and try to get inside their heads.  Below are some questions that might help if you think about them from the customers point of view:

  • Why are they buying my product?
  • What are they trying to solve?
  • What are their frustrations?
  • What are their desires?
  • How does your product enhance their life?
  • What is important to your customers?
  • How is your customer going to use your product?
  • What is driving their decisions?
  • Are they in a short-term mode of thinking or long-term mode?
  • Who is making the decision or is it a group?
  • Why do customers buy from your competitor?
  • Put another way, why aren’t customers buying from you?

By systematically doing this, you start to build a framework of what is valuable to your customers.  Of course, each customer is different but there are some similarities.  Ideally you sell to one main type of individual or business and it would be easy to go through these questions with that A client in mind.  However, if you have two or three different types of clients, then you need to go through these questions separately for each of your main types of clients.

Only by identifying what is valuable can you then identify ways to increase or market that value.  When you increase what is valuable to your customers, you increase your loyalty from those customers.  And that translates to improved profitability.

Places to Start:

  1. Make a list of 10 things that are valuable to your customers.
  2. Have your team do the same.
  3. Ask your customers what is valuable to them.
  4. Compare the answers.
  5. Put together a composite of what is valuable to your customers.

June 16, 2017 – What Story Am I Telling?

Posted on | June 16, 2017 | No Comments

Main Idea:

What are your priorities?  Can you clearly articulate them?  Does your team know what they are?  Does your spouse?  Do you live them?

Expansion of the Idea:

This past week I ran a financial planning workshop that was designed to help clients understand the basics of financial planning.  I felt that I needed to run this because I see a lot of situations where people are woefully unprepared for retirement.  I was discussing this with a friend who is also a CPA.  He asked me if I was moving my firm more into financial planning because he knew that my focus was on helping the small business owner improve their businesses.  I told him that my focus is still on the small business owner and this is a part of what I can do to help the small business owner.  There are benefits to non-owners as well, but the focus is on the small business owner.

However, this led me to think about what my true priorities are.  I am pretty clear on what they are.  I think my team knows them.  The question is whether I am living them.  I think I am because my time and money are focused on helping small business owners with their businesses.  I am investing time and money on improving my skills and those of my team.  I hope that my clients would see the same thing.

Yet I do know that I drift.  We all do.  Life gets in the way.  Emergencies pop up and you aren’t in control for a day, a week or a month.  You get away from the habits and practices that made you successful.  You are focused on playing whack a mole as opposed to fixing the bigger problems.  Your financial statements tell a story about your business and your strategy.  How you spend your time fills in the rest of the gaps.  It tells a complete story.

The question to ask is:

Is my time usage telling the story that I want it to?

If not, then you need to figure out how to get back on track.  There are three questions to ask:

  1. How are you spending your time?
  2. What are my priorities?
  3. What do I need to do differently?

This exercise should be done a couple of times a year to insure you will achieve all of your goals.  You are in a unique position to help your business.  Your business can grow only by doing the things that you are uniquely prepared to do.

Places to Start:

  1. Brainstorm with your team on the goals for the business.
  2. Then do the same for your goals, both personally and professionally.
  3. Keep a log of your time for a few weeks.
  4. Evaluate what you can get rid of completely, or delegate to someone else.
  5. Discuss with your team if there is something you should add to your schedule.

June 9, 2017 – What Can I Control?

Posted on | June 9, 2017 | No Comments

Main Idea:

How likely is it that you will hit your long-term goals for the business?  What are the levers that you can adjust?  How often do you adjust them?  What is the impact when you do adjust a critical piece?

Expansion of the Idea:

Over the last few months I have had a number of clients talk to me about their financial situation.  They were concerned they weren’t going to be able to retire well.  I decided to do a couple of workshops on simplifying the financial planning process because non-financial planners do not understand the words or the process.  The problem with not understanding is that people tend to put things off if they don’t understand them.   As I was doing this I decided to develop a simple spreadsheet that demonstrated the essence of what people need to do to retire well.  I ended up with three controllables that people can use.  These will have the most impact on whether they can retire in the manner they would like.  They are:

  • the age you are going to retire,
  • your annual spending, and
  • how much you are saving between now and retirement.

Everything else is fixed or is pretty much outside of your control.  The key takeaway is that the earlier someone addresses this planning the more they can impact it.

The same is true in our businesses.  We have certain things that we can control that will impact our businesses.  Here are my top five things that I think will impact small businesses:

  1. Our time
  2. Our mindsets
  3. Our investment in our people
  4. Our marketing and our messaging
  5. Our planning

Most small business owners focus on one thing, sales.  Most of us can’t go out and just sell one more item without extraordinary effort.  It is hard to find potential customers that are ready to buy our products or services, convert them to actual customers, deliver the product or service and make sure that they are ecstatic with our customer service.  It doesn’t matter what we are selling.  All of our people, systems, branding, marketing need to be working in sync to generate new business and then to keep those customers coming back and referring new customers.  And we need to be doing it in a way that is profitable for us and for our team.   When we have good sales months, it can mask whether our business is operating well.  When that happens, we don’t do the hard things to make sure we are successful in the long term.

I will go into more detail on these in the next few weeks.  I would encourage you to think about these items that might impact your future.  Just like our personal retirement planning, these controllables won’t automatically guarantee the desired results.  However, inattention to these controllables will almost always guarantee unwanted results.

Points to consider:

  1. What are the top 3-5 controllables in your business?
  2. Of those, what will have the most immediate impact if you focused on it?
  3. Which would have the greatest impact?
  4. Discuss this with your team.

June 2, 2017 – Who is Your Core Customer?

Posted on | June 2, 2017 | No Comments

Main Idea:

Do you have a good handle on what types of customers buy from you?  Do you provide a range of services to those customers?  Do you know what your profitability is by product line and by customer?  Do you like your customers?  Or, do you groan when a customer calls your office?

Expansion of the Idea:

When I was in high school and college, I worked in an Italian restaurant.  It was a small local chain with good food but great pizza.  Celebrities used to come to the restaurant when they were in town.  On certain days like New Year’s Eve, the kitchen would be completely overloaded.  That was the only time that the owner would come down from his offices to help out in the kitchen.  However, it didn’t matter where the biggest backlog was, he would only help on the pizza line.  That was what he cared about.  He knew that his business was tied to keeping the customers that loved his pizza happy.  The rest of the kitchen was important but the pizza line was critical. The owner knew what his core customer cared about and why they bought from his business.

Most small businesses, and CPA firms are small businesses, need to know who is their core customer.  Before I really understood this, my client selection criteria consisted of whether a potential client could afford our services or if we need the business to keep the staff busy or something like that.   And I tried not to take on any jerks.  Every time I took a client that I knew wasn’t a perfect fit, I regretted it later.  I finally started to identify what I wanted in a client.  I also started to eliminate services that I was perfectly qualified to perform but didn’t fit my vision for the business.  After doing this for a while, I zeroed in on who my core customer is and what they want.  I understand this customer much better because I am focused.  This allowed me to do the following:

  • It simplifies my marketing and branding decisions.
  • It allows focus on my services.
  • It provides boundaries for other services.
  • It allows us to become experts, whether we call ourselves that or not.
  • It provides a decision path for accepting new clients or terminating existing clients.
  • It improves profitability because I am focused.
  • It allows for better training of my team.

The best part of this whole process is that it shifts us from identifying ourselves by what we do to who we serve.  When you start having an outward focus, it changes your business in ways that are hard to imagine and harder to imagine ever losing.  I think my clients have benefited from this increased focus.  I know that my firm has benefited.

Whenever I have discussed this with various small business owners, almost universally they say that it is impossible to have just one type of customer.  They sell to a variety of types of customers or they might have multiple business lines.  They cannot narrow their core customer to one type.  There are valid business reasons to have different lines and types of customers.  However, everything needs to revolve around your main customer.   My core customer is a small business owner.  However, I do serve individuals by doing tax returns.   My team understands that our primary focus is the small business owner.  We cannot let the individual tax returns impact our service to the small business owner.  This provides clarity to everyone in my firm.

Points to consider:

  1. Do you have a clear understanding of who your core customer is?
  2. Do you have an intimate understanding of their operations or what they use your product or service for?
  3. Have you discussed this with your team?
  4. Have you evaluated the profitability of your customers and product lines?

April 26, 2017 – Do You Have an Expectations Gap?

Posted on | April 26, 2017 | No Comments

Main Idea:

When you buy something, what are your expectations of that product?  Who controls what you think about the product?  Does the seller explain the product and its benefits and limitations or do you know what you want it to do?

Expansion of the Idea:

A few weeks ago, I was in the office where our water cooler was located.  I heard a sound and looked down.  I could see that the carpet around the cooler was wet.  This was the second time in the last three years that our water cooler leaked.  I wasn’t very happy about this, especially since this was a week before the tax deadline and I had other things to do.  I called the company and told them about it.  They said that this is normal and happens because of a tiny pinprick in the seal of the bottle that lets air in and eventually will force a leak in the cooler.  They said that this frequently happens overnight when the cooler isn’t being used.

This caught me off guard.  I had an expectation that the cooler would not leak.  I thought that would be obvious.  Obviously, I was wrong.  The company sold the product with the expectation that there would be an occasional leak.  That was never communicated to me.  I thought the first leak was an isolated incident.  Now I could see it wasn’t.  The funny part is that the customer service representative that I talked to really didn’t understand that leaking every other year was not a good thing.  It could ruin carpets or ceilings if you are on the second floor.

What are the implications for our businesses?

All of us sell a service or product.  Our customers and clients have expectations.  If they are like me and the water cooler, they set their own expectations and we either meet and exceed them or we fail.  This expectation gap really determines if we are successful or if our businesses fail.  And it is not just small businesses that have this problem.  United Airlines is the latest big business example of a company that doesn’t get it.

The key for our businesses is for us to do what we can to control expectations.

  1. We have to understand what the customer expects.
  2. We have to make sure our product or service will meet those expectations.
  3. We have to communicate any deficiencies so that the customer understands if there are problems.
  4. We may offer upgrades from our basic services to cover the deficiencies.
  5. We have to test our product and service offerings to make sure we are delivering.
  6. We have to go back through steps 1-5 periodically to make sure something hasn’t changed.  If it has changed we need to modify our services.

By focusing on customer expectations, we can significantly improve our businesses.  If you have customers where there is still a gap, and it isn’t positive, then that might be a time for you to invite them to experience the wonderful service at one of your competitors.

Points to consider:

  1. Do you know what your customers expect from you?
  2. Are you clear in what your offerings are to your customers?
  3. Does your whole team focus on understanding your customers?
  4. Go through the 6 step process above and see if there are any changes in your business.

April 7, 2017 – Can You Grow by Focusing Inward?

Posted on | April 7, 2017 | No Comments

Main Idea:

How would you describe your plans to grow your business?  Is it a wing and a prayer?  Do you have a specific strategy that you know is critical and you must stay focused on?  Is it working?

Expansion of the Idea:

A few years ago, my son Kevin suggested that I would like a show that is currently on Netflix called Leverage.  There are about 5 seasons that originally aired beginning in 2008.  It is a cross between Mission Impossible and Robin Hood.  (If you want to understand that, just watch the shows.)  I got hooked.  I did not quite binge watch it but I probably spent more time watching it at night than I should have.  The big point of the show was that they achieved great things utilizing each person’s unique criminal abilities.  It is a great example of growing an organization while helping each member grow personally.

Most of us want to grow our businesses but we do things in isolation.  Small business owners typically make decisions individually and don’t involve their teams and outside advisors enough.  Great business owners do things differently.  First, they focus on their own growth.  Then they try to help their key team members grow.  After that, the power of the group takes over and helps push the business forward.  Jim Collins writes about this in Good to Great.  He states that great leaders get the right people on the bus in the right seats before they determine where to go.  Liz Wiseman wrote a book called Multipliers.  She writes that leaders are either multipliers where they get multiples out of their team members or they are diminishers where they get less out of the team.

Focusing on your own growth and then that of the team is not our normal tendency.  As owners, we want new customers.  We want more sales.  We can normally get them.  The key is to invest our time and energy in the right spot.  Most small businesses have untapped sales potential in our existing customer base.  We need to be able to serve that potential.  To do that our team has to be operating at a high level.

In all of my years serving small businesses, I have never seen a growing, healthy business that had a completely dysfunctional team.  And I have never seen a business that closed its doors that had a great team.  Great teams require a lot of work by the leader.  They need to be nurtured and mentored.  They require energy and guidance.  When you do that, you are rewarded by a business that is healthy and fun and growing.  That is what all of us are trying to do.

Points to consider:

  1. Are you growing personally?
  2. After you thought about question 1, ask your team if they agree with you?
  3. Is your team growing, personally and professionally?
  4. Are you intentional about helping them grow?
  5. Read Multipliers or Good to Great.
  6. Consider taking your team to the Leadership Summit.

March 24, 2017 – What Are Your Blindspots?

Posted on | March 24, 2017 | No Comments

Main Idea:

How many surprises do you get every day?  Are any of them big ones?  Do you ever feel as if you were lied to or betrayed?  Do you know what you don’t know?  Have you ever had a day when you went to work thinking everything was good and you were hit with a loss of a key customer, a major problem in the plant, and an employee decided that now was the time to find himself?

Expansion of the Idea:

All of us have some of these surprises during our career.  Some of the issues are:

  • Family
  • Team members
  • Business operations
  • Health
  • Industry
  • Finances
  • Competitors
  • Customers
  • Vendors

I could keep going.  The list is long of places where we can have a surprise.  When they happen, our initial reaction is one of “Why me?” and “Why now?”.  We might get mad.  We might get depressed.  We might even be thankful.  We put out the fire as best we can.  At that point, the best thing we can do is do a retrospective review of how it occurred and whether there was something you could have done to avoid the problem.  If done properly and with your team, you frequently can learn a lot.

A number of years ago, I had an issue in my firm.  I lost several major clients in a short period.  And, of course, this was when the kids were in college and it wasn’t a good time.  As I looked at each loss individually, I evaluated our services and how we performed for the client.  I didn’t see anything that we could have done to avoid the loss.  However, when I stepped back and looked at the clients in total I saw a pattern.  The problem wasn’t in our services.  The issue was that the second generation came into those businesses.  It changed the way that the businesses were operated and who made decisions.  While I knew about the changes, I was completely blindsided by how they would impact me.

If I had known about the extent of the issues, I would have tried a few different things.  As a result of the losses, I developed some programs and workshops to help with transition and succession.  I was more intentional about developing relationships with the next generation.  Whenever there is a major change like this I know I am at risk and I will lose some of those clients.  But if I am aware of the problems, I can mitigate some of the risk.  What it has done for me is that I have a healthier business right now because of some of the changes I made.

All of us have these blind spots.  I continue to have them.  I wish I knew what all of them are.  What I do now is actively look for them.  I ask questions.  I evaluate responses.  As Sherlock Holmes discussed in the short story, Silver Blaze, he was drawn to the dog that did not bark.  We need to look for situations and reactions out of the ordinary.  The funny part is that they sometimes are closely related to your strengths.  By being aware of the potential problems, you can put systems in place to help you.  That will help you build a better business.

Points to consider:

  1. Are you curious?  Do you look for inconsistencies?
  2. Do you have the right advisors?
  3. Will your key team members tell you the truth?
  4. Are there any items on the list above that concern you?
  5. Read Silver Blaze by Arthur Conan Doyle.
  6. Read Leadership Blindspots by Robert Bruce Shaw

March 17, 2017 – Are You Wearing Green Today?

Posted on | March 17, 2017 | No Comments

Main Idea:

Are you wearing green today?  Do you remember getting pinched in grade school if you didn’t wear green?  Are you planning on watching the NCAA basketball tournament over the weekend?  Do you do the same things every year for Mardi Gras or Easter?  Do you go to the same place for vacation every year?

Expansion of the Idea:

As you know, today is St Pat’s Day.  On St Pat’s Day, there are only two kinds of people in the world, the Irish and those that wish they were.  (I know only an Irishman would say that.)  It is tradition that we wear green.  There is some disagreement as to the exact origin of why green is associated with St Patrick’s Day.  How it started is not completely relevant.  The point is that it is a tradition that reminds people of the Irish and their struggles and their successes.  This is traditionally done while drinking a green beer.

We have a lot of other traditions that we keep in all aspects of our lives.  Our businesses have some traditions that are formal and some that are informal.  In my case, we have a very intense period of work from January 1 through April 15.  One of our traditions, is to make sure we are done on the 15th in the morning so we can go out for lunch and take the afternoon off.  We follow that up with a dinner with spouses in the next few days to celebrate a great tax season or, in a few cases, we celebrate that tax season is mercifully over.  The key is that we use the tradition to get together as a team.  It is a way of thanking the team and celebrating the effort.  We cannot always control the outcome, but we can always control the effort.

Some common traditions are:

  • Two day off site strategic planning retreats
  • Bringing in donuts every Friday morning
  • Annual Christmas bonus which was hilariously highlighted by National Lampoon’s Christmas Vacation
  • Daily morning meeting
  • Annual Employee Evaluations
  • Cardinal Baseball Game
  • Office March Madness Brackets
  • Going to the Leadership Summit

Traditions can be a great way to build a winning culture. They can bring people together.  You can celebrate together.  However, you need to be intentional about them.  If you are not careful you can have some bad traditions.  Employee evaluations may be a tradition for your business but they are frequently a nightmare.  This is where the leader needs to step forward and help set the framework for a positive event, meeting or period in time.  Traditions, like employees, have to be managed.  If they are not working for the business, then they need to be fixed or eliminated.  New traditions can then be adopted.

Points to consider:

  1. What are your traditions?
  2. Are they positive or negative?
  3. Can they be improved?
  4. Are there additional traditions you would like to adopt?
  5. Discuss this with your team.

Happy St Patrick’s Day!!!

March 10, 2017 – Does Your Business Have Momentum?

Posted on | March 10, 2017 | No Comments

Main Idea:

Is momentum something that just happens?  Do you know how to create and maintain it?  What happens when you lose it?

Expansion of the Idea:

Last week I wrote about your business being properly powered.  One part of that was on the subject of momentum.  I thought it made sense to expand on this because I only briefly mentioned it last week.  It is important enough to discuss separately.

Momentum can mean a lot of different things. For today, I am going to use the following definition:

Momentum in business is the observable impact of positive forces moving parts or all of your business forward.

All of us see momentum in various aspects of our lives but we frequently don’t spend enough time creating and sustaining it.  Some of it is controllable and some non-controllable. It is critical that we gain positive momentum because if we aren’t moving forward and growing, we will be experiencing negative momentum or stagnation.  When that happens, our businesses are more likely to experience severe issues.  You can’t always generate positive momentum in something like sales.  However, you can generate positive momentum in sales calls, or order size.  You need to look at what is working.

Momentum sometimes starts organically.  However, if it doesn’t, then the leader needs to be the leader.  She must create some small wins for the business to create the momentum.  This is not just in sales.  It would also include product development, employee attraction, sales leads, system implementation, and marketing initiatives.

One of the most critical parts of being a leader is to infuse energy into the process.  Momentum generally starts small and grows.  Once it gets going, it can be contagious and impact other departments.  The key benefit of momentum is that it energizes the team which further fuels the momentum.  This allows the leader to be re-energized.

One mistake that some leaders make is to not communicate and celebrate the positive momentum and wins.  Team members want to be on a winning team.  They want to be doing something positive.  When they are kept in the dark they won’t push hard to continue the momentum and you will lose it.  Celebration needs to fit the situation but it should be built into your culture.  Businesses that have a culture of celebration generally have more wins than their competitors.

And, if you do lose momentum like everyone will do, you just need to go back to basics and create some small wins.  Use those wins to create bigger wins and you will gain the momentum back.

Points to consider:

  1. Does your business have positive or negative momentum now?
  2. Is there any part of your business that is really working well? Why?
  3. Can you learn anything from the parts that are working well?
  4. Do you have the energy to generate the momentum your business needs?
  5. Are you celebrating your wins?
  6. Do you need to generate personal momentum and energy?
  7. Visit www.willowcreek.com/events/leadership to learn about the Global Leadership Summit.

March 3, 2017 – Is Your Business Properly Powered?

Posted on | March 3, 2017 | No Comments

Main Idea:

What keeps you going when you hit rough patches?  Do you know what energizes you?  Are you intentional about getting around people that energize you?

Expansion of the Idea:

My wife and I had an opportunity this week to go to Huntington Beach to attend a Leaders Gathering in connection with the Global Leadership Summit.  We were going to fly into and out of John Wayne Airport.  My wife explained that when you fly out, they cut the engines at a certain point because of a noise ordinance in Orange County.  I thought that was crazy but I was curious to see how this works.  Sure enough, when we were flying back out, we were up in the air for about 1 minute and power to the engines were cut back.  I don’t know at what percent of capacity the engines were operating but the sound reduction was noticeable.  The plane kept going because it was properly fueled and took off with good momentum.

Small businesses are a lot like flying out of John Wayne Airport.  We need to be properly fueled and generate momentum to get through the tough times that we will all encounter.  We need energy which can come from a lot of different sources.  For me, I attend the Global Leadership Summit every August.  Because I volunteer with them I attend two other national meetings associated with the Summit.  These three events are critical things I do every year because they fuel me.  I love the personal growth and development and the practical things I learn to help me, my team and my clients.  The timing of the latest meeting was probably not the best but it will help sustain my energy over the next six weeks as we push through tax season.

Every business owner and team member need to figure out what fuels them.  We are all wired differently.  Some people need new challenges.  Others need to go fishing.  Others need to attend conferences and interact with peers.  There is no right or wrong.  What is universal is that we need to be intentional about figuring this out and setting aside time to do it.  We see the impact of not doing it.  We get crabby, tired, burnt out.  We are not at the top of our game.

However, even when we are properly energized, we can stall out or run into a rough patch like flying out of John Wayne Airport.  That is where we have to be intentional about creating momentum in our businesses.  We have to create systems and marketing plans that will keep our businesses moving forward.  This is sometimes tough to do but it is critical that we do whatever we can to create the momentum.

Points to consider:

  1. Do you know what fuels you?
  2. Are you intentional about creating time for what energizes you?
  3. Do you know what energizes your team members?
  4. Does your business have momentum?
  5. If momentum is a problem, are there areas where you can create small pockets of momentum?
  6. Visit www.willowcreek.com/events/leadership to learn about the Global Leadership Summit.
« go backkeep looking »
  • About

    These weekly ideas are brought to you by FitzGerald & FitzGerald P.C. For more information about how to use these ideas with your small business contact Tim FitzGerald at trfitz@fitz-net.com.