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Looking for a Business Opportunity? Read these words. December 4, 2013

Posted by David Dirks in business strategy, Entrepreneurship, Strategy.
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David Dirks

David Dirks

Every once in a while, someone drills out a few words that just hit you like a ton a bricks.  They are often a string of words that are simple as they are powerful and true.  For those who are looking for ways to create a business and – more importantly – a strong business model – then take in these words by Box CEO Aaron Levie:

“Take the stodgiest, oldest, slowest moving industry you can find and build amazing software for it”

That’s it.  Ok, so maybe your not into software but the advice still applies to anyone else.  Take a stodgy industry that no one pays much attention too…isn’t the latest hot business platform…and find ways to innovate the heck out of it.  Turn it into something that people will say, “why didn’t we think of that?”.

Today they call it “disruptive innovation”.  Whatever you call it, it’s an age old way to develop a business concept that has the best chance for survival and growth.  That isn’t to say that it’s easy.  Not a chance on easy but Levie’s point at least gives you a way to channel your enterprise desires and try to avoid doing what everyone else is doing.

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The Quick and the Dead. September 3, 2013

Posted by David Dirks in business strategy.
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David Dirks

David Dirks

When it comes to entreprenuers, in my eyes there are only two kinds:  The Quick and the Dead.  The Quick are those that survive and grow as entreprenuers even though they too can hit dangerous bumps in the road.  The Dead are…just dead.  They are the ones who try, fail and never come back again.

Let’s take a look at the The Quick to understand what The Dead didn’t do.

The Quick are

  • Quick to act when action is needed.
  • Quick to counter competitors when the competition gets tough.
  • Quick to ask questions – and question everything.
  • Quick to make incremental changes to reflect the real world.
  • Quick to listen – and then listen more.
  • Quick to adjust their business models.
  • Quick to cut their losses on losing propositions and move on.
  • Quick to completely change their business models if that’s what it takes.
  • Quick to fix customers problems.
  • Quick to get back up when they get knocked down.
  • Quick to recognize & correct a bad hire.
  • Quick to start over and begin again.
  • Quick to recognize their own weaknesses.
  • Quick to allow others to help identify solutions to key challenges.
  • Quick to learn from competitors.
  • Quick to know when they are too in love with their business.
  • Quick to take things slowly when that makes the most sense.
  • Quick to not think they know it all.
  • Quick to know that being quick is better than being dead.

The Dead are

  • Dead.

Being “The Quick” doesn’t mean they are always fast.  It really means that the best entreprenuers – the ones that stand the test of time – are those that take action when action is called for.

On Building A Sales Organization – 4 August 26, 2013

Posted by David Dirks in Sales Compensation, Sales Management, Sales Metrics, Sales Strategy/Tactics, Sales Tactics.
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Once you figure out the kinds of sales team you need and how to compensation them to higher performance, you’ll need to ensure you arm them with the resources they’ll need to succeed.

First is sales collateral – those print and digital pieces that can help the sales process along.  That said, I’ve never seen or heard of any sales collateral that sells all by itself.  Create sales collateral that support the sales process.  The principle of “less is more” applies here.  And makes sure that your sales collateral looks professional and not like it was put together on the cheap.

Then there’s sales training.  This isn’t the place for determining what kinds of sales training your burgeoning team of one to more sales people.  What I can tell you is that the right balance of sales training and coaching on a regular & consistent basis is worth the investment.  Most small businesses provide little to none sales training except perhaps for some training at the beginning of their employment.

Sales training is like physical exercise.  It should be challenging and slow build sales “muscle” – those skills that become part of their sales behaviors after a period of training and reinforcement.

Sales coaching is another support mechanism that’s necessary for a bare-bones but effective sales organization.  The challenge is that most small business owners don’t often have the sales background that would enable them to provide sales coaching.  What to do?  If you don’t have a sales management background here are three key points to cover in each of your individual sales coaching sessions:

  • How close are they to meeting their current sales goals?  If not close, why and what can be done to improve performance?  If they are on track, what are they doing right?
  • What are prospects & customers saying about our products and services?  This is a good time to take the “pulse” on what the street is doing or saying about the kinds of products and/or services your provide.
  • Set goals for the next session.  Success is incremental and so is the progress needed to get there.

Sales professional need regular & consistent support in the field.  Make sure you are able to provide it before you commit to building a sales force.

On Building A Sales Organization – 3 August 26, 2013

Posted by David Dirks in Sales Compensation.
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If all else goes well, compensation is usually the part that falls off the map.  The majority of small business owners that I’ve seen over many years try to find a way to pay the least they can.  They create so-called sales compensation plans that seemingly have a “path to make a lot of money” as one small businessman told me once.  The math is usually some blown up algorithm that has no relationship to the time it takes to really sell the product or service.  It assumes that the “sky is the limit” and that the product or service is so beloved that it will fly off the shelves.  Reality meets fantasy and no one wins.

As I said in the beginning of this series on the subject of sales compensation:

Willing to create a sales compensation plan that truly rewards people for their efforts but doesn’t leave them wondering how they are going to eat while they ramp up & beyond.  Whether you hire experienced or entry-level sale people, be prepared to compensate them within the range of what is at least the standard for you industry.  Going cheap on the compensation plan equals  consistently high turnover.  At best, you’ll be a good place for someone to get some training and experience before they go off and find a real sales organization to make a living off of.

Years of sales compensation planning provides me with several takeaways:

  • A great compensation plan rewards sales behaviors that lead to tangible improvements towards meeting or exceeding specific objectives.
  • A one-size-fits-all sales compensation plan does not exist.  The best plans are customized to your specific industry and needs.
  • Spend some time looking at how compensation plans both are similar and where they vary.  This is time well spent.  What you will learn will save you time and headaches.
  • Stress-test your compensation plan first before finalizing it.  Do the math and run some realistic scenarios through it to ensure it rewards the behaviors that you want to reward.
  • All data that is used for calculating compensation must be verifiable.
  • Make sure your compensation plan cannot be manipulated.  If there is a weakness in your plan that could favor the pockets of your sales force with little benefit to your business – sales people will find it pretty quickly.
  • Base your plan on realistic sales income scenarios.  I love the way most multi-level marketing (MLM) programs can develop multiple scenarios that look and sound like you to can make $5000 a month in extra income by only do X, Y or Z.
  • Sales compensation plans should be reviewed at once per year at a minimum or whenever major changes in your business (changes in product pricing, profitability, competitive changes, etc.) make it necessary to adjust your plans.

Overall:  Avoid the extremes:  paying too little or paying too much for little real results.  When in doubt, hire a sales compensation expert to help you craft a plan that fits your business needs.

Iteration Is A Strategy July 1, 2013

Posted by David Dirks in business strategy, Dealing with change, Solving Business Problems, Strategy.
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David Dirks

David Dirks

Does the Facebook of today look like the Facebook when it was first launched in 2004?  Did Amazon perfect its business model of today in 1994 when Jeff Bezos founded it?  Is the IBM of today the same as the IBM of say 40 years ago?  Here’s another question for you: How many businesses hit a genuine business model home run where sales and profits start cranking out right from the start?

The answers to the above questions are “n0”, “no” and “once in a blue moon – if ever.”  To iterate is to keep trying – keep pushing your business model forward.  It’s tinkering with the engine until it sounds like all cylinders are working smoothly.  In some cases, it’s challenging the very dream we have hold so dear in our business – the very vision we have might not be the vision that produces the life blood of any business – greater sales, growing profits and cash flow.

Iteration is a process that should be integrated into the culture of most any organization but rarely is.  Here are some thoughts on the process of iteration:

  • Don’t get married to your vision or dream.  What? How can we achieve greatness without a vision we can steadfastly commit to?  It’s not easy – if it was then iteration would be a breeze and everyone would be doing it.  They aren’t – which is just one reason why many organizations fail within five years or less.
  • Business plans are like war plans.  Everything changes when the bullets start to fly.  Yes, I know you spent a ton of time working and toiling over your business plan and it’s a great starting point but…when the reality of the business environment hits it, it’s over.  Competitors don’t play nice or according to the plan.  Customers are more finicky than the business plan sales projections call for.  Things have to change when the bullets fly.
  • Not everything has to change.  Sometimes iteration means tweaking only what needs to be tweaked.  Keep testing, changing, moving forward – throwing out what isn’t working and keeping what does.
  • Challenge yourself to iterate on purpose.  When you realize that iteration is a part of your business life if you want to succeed for the long run.

When you build a business…it’s about the long run isn’t it?

Dave

Service Failure: Samsung June 19, 2013

Posted by David Dirks in Building trust, Customer Service.
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DirksProPhotoI own a great Samsung DLP TV and have had it for about five years.  Just recently the color started faltering so I went online and sent a request on the Samsung service site for some…service.  A few days later I received an email from someone from the CA offices of Samsung.  Their email stated in part that they would make three attempts to contact us to arrange service.  He noted in his email that this was their first attempt.  So…I emailed him back the same day – thinking time was everything.

The next day – after only the first attempt – Samsung sent me an email to let me know they cancelled my request for service.  No reason.  Just canceled.  So, I emailed the nice fellow (had no phone number or otherwise I would have just called him).  I let him know that I had just rec’d a note from Samsung stating they cancelled my service request and that I in fact WANTED service – a paying customer!

Result:  Nothing.  No email response.  No nothing.  And of course, no service.  Well, that was the end of my efforts to work directly with Samsung and their dedicated service provider.

Ok.  So the next day I go online and find a local TV repair service.  I fill out the service request form and send it via  their website.  Result: No call since and it’s been three days.  I guess they are just too busy for a PAYING CUSTOMER like myself.  What business are these people in?

What to do?  I turn to Sears.  I go online and within a few minutes am able to schedule a service appointment.  Done.  Now let’s see if they show up.  I’ll let you know how this saga plays out in a subsequent blog post.  Stay tuned.

UPDATE 070213: So Sears won the day.  Not only was I easily able to set up an appointment for a repair person to come out to my house they also called to confirm the appointment (on top of the email confirmation).  The repair person was professional, clean and knew his stuff.  Problem solved for only $99.00 (which is credited to any repairs too).

Those other guys who never called me?  I found out later that they are just about out of business.  No wonder.

Community Marketing: Fact vs. Fiction April 12, 2013

Posted by David Dirks in Community Marketing.
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David Dirks

David Dirks

One underutilized area of marketing is where a business supports one or a few local community events and/or organizations.  I say it’s underutilized primarily because most businesses I know are often not quite sure how to relate support with business needs.  Then there’s the issue of why it’s good business to support local organizations and what are the best ways to support them.  Here’s my list of ‘fact vs. fiction’ when it comes to what I call community marketing:

Facts:

  • Community marketing can be strategically important to a small businesses.  Sure, you can ignore the world around you but smart businesses who support community events and organizations reap the benefits of establishing additional good will and brand equity within the community.  Helping non-profit organizations in a real and genuine way raises your stature and your businesses stature in your community.
  • Focusing on the “giving” part means that the business benefits to you take care of themselves and accrue in different ways.  Most people can see through a person and/or business that’s clearly providing community support in the interest of only getting more business for themselves.  Be selfless in this case.

Fiction:

  • You have to spend money to support community-based organizations.  Yes but often they want your time as a volunteer to sit on a board or committee…they really could use your brainpower but the money helps too.  Perhaps you support them by lending them some manpower from your business for an event.  Whatever it is, it isn’t just about supporting with direct dollars.
  • Buying ads in community-based events will drive business.  No, it won’t.  You have better chance of winning the Powerball.  Why? First, ads in community-event flyers have a life expectancy of about 10 seconds.  Don’t believe me?  Where do you think these printed booklets often go?  On someones coffee table?  On their fridge?  Taped onto a wall? In their purse?  No, most are left on the floor or table on the night of the event.  Secondly, it takes more than one ad impression to get people to respond to your ad.  In fact, it takes at least 3 impressions to get anyone to notice you at all.  So you think that one 5 x 5 ad in the community flyer is going to drive your business? Make the phones ring?  Rookie mistake.  The real reason you buy ads in community events is TO SHOW YOUR SUPPORT AND PROVIDE THEM WITH A SOURCE OF FUNDING.  That’s it.
  • Advertising in community based publications is branding.  No, it’s not – at least not like Nike.  You’re not Nike and spending a few hundred dollars per year to maybe $2k or $3k won’t make you a household name either.  Why?  Again, because the life expectancy of most community publications is minute and the amount of people who actually bother to look at the ads is even less.  If advertising is your focus for branding or business development, you’re focusing on the wrong thing. Instead, build your business brand by building strong and positive relationships as you network through the community.
  • You should never expect any business resulting from your involvement in a community-based organization.  Wrong.  The difference is that you should never hold your support for any community-based organization hostage to your demand to drive business in your direction. People will see through your real motives and your reputation will be tainted as such.

Want to know how the real community players (I mean that as professional business people who are genuine in their support) get more business?  They network.  They development genuine professional relationships with other business people.  People like to support other people who have like-minded interests.  You can get more business by being a consistent and genuine supporter of community organizations if you focus on helping the organization and leveraging the relationships of the people you meet along the way.

Learning point:  If you want to meet other successful business owners and other key community influencers, working to help better community-based organizations is where you will find them.  Just look at the boards of some of your community organizations?  Whose on them? Losers? I think not.

Supporting community-based organizations can be a very smart investment of both time and money if you are genuine and really committed to helping them.

How Nice But Incompetent People Survive March 18, 2013

Posted by David Dirks in Management, Performance issues.
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DirksProPhotoHaven’t you been a bit curious as to how people you work with who might be nice (but sometimes not) and are incredibly incompetent…but yet survive to live another day.  In business, you run into these people and often end up shaking your head…wondering how they do it.  How is it they can be so incompetent – often at a very noticeable level – and still have a job?  What gives?  And you know the people I’m talking about!

A few years ago, the secret to the incompetent success was revealed to me.  There was a person whom I and more than a few senior managers knew was about as incompetent as they come.  Nice guy who couldn’t manage his way through a paper bag.  Probably came close to getting fired more than a few times in his career but nonetheless survived.  How?

Ready for this?  Here are three reasons he (and the other incompetents) survive:

1.  They often work cheaply.  Low price point?  That can be the winning number.

2. They’ll often work like dogs and do what they are told to do.  I guess there’s something to be said for people who don’t talk back.

3. They’ll take abuse and keep on ticking.  Remember as a kid – the inflatable bozo the clown that you could punch and it would come right back at you?  That’s the one.

Apparently there is some utility value of the person who has a low labor price point and who will do the dirty work that others will not do.

Of course, there’s always the family-member problem – where a completely incompetent gets to stay because the have a blood line connect to the owner of the business.  Not much you can do about them as blood truly is thicker than water, as the saying goes.

Since learning this about incompetents, I often just smile and keep on going.  Incompetents have their place in the business world and I get it.

Three Trends To Watch February 11, 2013

Posted by David Dirks in Disruptive Trends.
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DirksProPhotoI don’t usually make “trends to watch” postings.  While in my work I’m constantly researching, reading and reviewing information of all kinds, I’m not inclined to predict the future.  In this case, I’m not predicting as much as I am signaling that the following trends are already on a collision course with traditional business models.

So, take the following as you wish. Perhaps the best I can do is spark some interest in one or more of these trends and encourage you to do your own research and reading.

Anyway, here are three trends that keep popping up consistently – and each has been growing in scale and importance over the last 5 to 10 years.

The way we approach higher education.

One of my son’s goes to a great college and that great college costs $52,000 per year to attend.  At the end of four years, he will have a very fine education but will have burned through over $200,000 in cash.  Why is this so?

Another issue.  Our country’s finest universities are known not for who they include but for the greater number of students they exclude.  Harvard, Wharton, Northwestern, Chicago, Standford  and others attract not only the brightest of the youngest minds but also the brightest of the experienced minds to teach them.

If you or your kids are unable to enter the Ivy league for higher education…does that mean you are relegated to a life of mediocrity? I recommend a good read here: Outliers by Malcolm Gladwell.  Read the book and you’ll clearly see where I’m going here.

Here are a few key trends that will change the way we access higher education:

  • Increase in the availability of knowledge both online and offline.  Universities have historically been the originators and gatekeepers of “knowledge”.  The underlying foundation for that tradition has been under siege for more than a decade now.
  • New higher education models are emerging.  Udacity and the Minerva Project are just a few of the many higher education models that are breaking the mold and creating high quality access to knowledge and higher learning.
  • Global mobility of both knowledge & students.  As the digital world changes the way we access and utilize knowledge in all its wonderful forms, students will be able to globalize their access education.  The global competition for students will mean that universities will become more aggressive in offering full-fledged offerings to any corner of the world.
  • More partnerships with corporations.  There’s plenty of great research and knowledge being created in almost every industry today.  Connecting higher education and industry knowledge bases will blur the lines but create perhaps a better way to prepare students for the every smaller but complex world we live in.

The elites won’t like this but too bad.

The way we make things. Maybe you’ve heard all about 3D printing. If not, check this excellent primer from TED: http://www.ted.com/talks/lisa_harouni_a_primer_on_3d_printing.html

3D manufacturing is already happening and creating revival in “small manufacturing” around the world.  This technology and the ones that will surely follow will change the way we think about manufacturing products today.  It will blow your mind but gives rise to the ability for new businesses to create products once thought only to be produced if you invested big bucks into creating a traditional factory.  The investment in the traditional “factory” model has kept a lot of great ideas underground or never to be realized.  That will change and create entirely new business opportunities.  As 3D technology advances, you will be able to run your small manufacturing operation from anywhere in the world.

The ways we raise money. Kickstarter and Crowdfunder have turned the world of sourcing funds for projects of all kinds on its head.  While it doesn’t necessarily mean that every idea will get the funding it needs, it does mean that ACCESS to that funding is anything but traditional.  You still need a great project or enterprise idea – but the traditional means of sourcing is not the only game in town.

The dynamic author Seth Godin used Kickstarter for his lastest book project, The Icarus Deception.  He thought he’d raise $40,000 but instead raised over $240,000 instead.  Now, Seth already has a great and loyal group of followers who helped him seed this project but that isn’t the point.  Seth was able to take a great idea and source his needed project funds from anyone who wanted to participate.  You didn’t have to have millions to participate – $4 bucks got you into the game.  Of course, you could invest more and get more in return but that was up to you.

The way we raise money is changing.  Don’t tell your bank that.

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Well, that’s it for this post.  Keep an eye on these three trends as they grow and evolve.  You know I will.

 

Driving Foot Traffic: Woolworth’s Style December 14, 2012

Posted by David Dirks in Driving Store Traffic, Retailer Store Strategies, Sales Strategy/Tactics, Solving Business Problems, Strategy.
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David Dirks

David Dirks

It took the latest issue of Businessweek to remind of that oftentimes what is new is old.  Case in point: the Woolworth’s food counter.  Remember (for those of you who are old enough to) the days when you local Woolworth’s store had a lunch counter where great, cheap hamburgers, fries and a great milkshake where just across from those square product bins that checkered the store?  Woolworth’s was a pioneer in creating a way to drive foot traffic with something that had nothing directly connected to the products they sold.  By having a soda fountain style lunch counter, there sales per square foot where for a long time better than average.

The lunch counter couldn’t save Woolworth’s from going out of business after decades of success but the idea of driving traffic by providing food lives on.  Nordstrom operates about 200 restaurants of one kind or another, including coffee bars.  Barnes & Noble developed its coffee bar concept to drive traffic and create a reason for people to hang around the store longer.  You’ll also notice that the coffee bar is a place where people meet to socialize.  They know what Woolworth’s long understood: The longer they stay, the more chance they will buy.

So am I suggesting that brick & mortar store owner rig up the BBQ and serve up some burgers?  Not exactly.  What I am suggesting is that in the battle of driving foot traffic it might be that food or drink (coffee bar?) might just do the trick.  As I always say, there is no magic bullet for creating foot traffic – only hard work and great execution wins the day.

What can you do to create ways for people to want to come to your store and stay a bit longer?  Think about it.