5 Critical Issues to Jump-Start Your Business By David Saint-Onge Keep it simple, stupid! This acronym was first coined by Kelly Johnson, a lead engineer at Lockheed who helped create the Lockheed U-2 and Sr-71 Blackbird, two key spy planes developed during the Cold War. This principle is best exemplified by the story of Johnson handing a team of design engineers a handful of tools, with the challenge that the jet aircraft they were designing must be repairable by an average mechanic in the field under combat conditions with only these tools. Hence, the 'stupid' refers to the relationship between the way things break and the sophistication available to fix them. I think there is an eerie similarity of this acronym in today’s business world. From low margins and increased competition, to skyrocketing administrative costs and a great need for increased efficiency, business owners are challenged on all fronts. There seems to be overwhelming confusion on the part of business owners as to what to do next. What seems almost incomprehensible to me is that in today’s business world many of the fixes being launched at business owners would, if implemented, actually take the business down the path to less profitability.
This article is a re-printed from the December 2010 edition, as approved by the UP Business Today
reporting that is not used by management to manage the company, implementation of information technology (including social media) that does not add value to the business, and broad-based diversification of business services into areas that do not produce quantitative and measurable results (i.e. profits). Why do business owners find themselves in positions where their businesses are no longer operationally efficient and, consequently, not profitable? Because in many instances business owners operate at one of two extremes; on one hand they are stuck doing things the way they have always done things or they take desperate measures by implementing tactics that simply do not work. In today’s business market, many business owners simply need to understand what their companies have become and refocus their efforts toward profitability. Yes, it sounds almost too remedial, but then again it is.
Entrepreneurs are risk-takers; this is the fundamental nature of leveraging everything you own to go into business for yourself. As entrepreneurs make the transition to successful business owner, they tend to Take for instance issues like become risk averse. Why elaborate marketing efforts does this happen? Because (my pet peeve is business now they have money and names on pens), internal
when you have it, you don’t want to risk it. This result is further compounded as the tenure of the business owner becomes over-extended. Simply put, sometimes business owners stay in their businesses too long. When this happens they inherently do not drive their businesses with purpose and desire. They unconsciously hinder the ideas and energies of their key employees, and their outside interests cause a lack of focus. All of these issues inevitably lead to an unprofitable business operation. As we prepare to embark on 2011 and another year of uncertainty in Lansing and Washington, maybe it’s time for business owners to stop holding their breath and take charge of the new normal in today’s economy. The following tips could help you gain control of your business and a positive bottom line. 1. Reestablish a Purposeful Mindset: There are simply too many distractions at work; too many meetings, too much social networking, too much hierarchy, and too much negativity. You must circumvent all practices that do not result in achieving measurable and attainable goals. From the telephone receptionist and field technician to the salesman and your professional staff, surround yourself with colleagues who want to be successful. Set pragmatic
and reasonable goals, accept professional advice, and hold you and your staff accountable. Regardless of what your competitors do (and say), always be the market leader when it comes to operational standards. 2. Refocus your Business Vision: Sit down and honestly assess your core business values and gauge them against what your company actually does. For companies who are suffering, you should quickly see that your stated corporate values are not insync with your actual business practices. Accept the reality of what your company is good at and do it; if you want to change these abilities do so with the same conviction as when you started your company in the first place. Too many businesses fail because they grow for the wrong reasons. Most importantly, articulate your vision to your employees. They cannot help you row the boat if they do not know when to row and how fast to row. And finally, always challenge your employees to get better. They are a business’ greatest assets and you should get out of them what you get out of your fixed assets. Educate them, entrust them, and let them make reasonable mistakes. But most importantly, do not try to make an employee something they do not have the inherent talent to do. Put them into a position to be successful.
3. Write a New Marketing Plan Leonardo Da Vinci is credited with and Implement It: having said, “Simplicity is the ultimate sophistication”. Maybe business Too many businesses spend money owners need to come to the realizaon marketing efforts that do not pro- tion of what makes their company vide a measurable return on invest- successful, and simply stick to it. ment. Lose the logo pens, the fancy logo-printed note paper, the business envelopes with full-colored return addresses, and the plethora of business flyers, brochures and mailings. Your marketing tactics should include a marked increase in direct sales. Stop hiding behind emails, websites, traditional correspondence and telephone calls. People use and retain businesses they trust. They cannot trust you if they cannot shake your hand and see the passion in your eyes. Marketing is important, but sales pay the bills. 4. Cut all Discretionary Spending: Although you want to be a good corporate citizen and you want to be proud of your efforts and the opinion people have of your company, there is a limit on the number of civic organization memberships, donated prizes, golf outing sponsorships and cash/service donations a business can absorb. Yes, many of these programs are invaluable to the communities you serve in business, but what do you want to be known for: a business owner of a viable business or a business owner who gave away his loyalty to his family and his employees simply because his/her ego needed to be stroked? 5. Establish True Efficiency in your Business Operation: Inefficiency creep finds its way into all business operations. Unnecessary meetings, too much management, unused data generation, and an undying loyalty to certain staffers who simply don’t care anymore or cannot do the job you need them to do. Business owners need to climb down from the big chair and get reacquainted with their company’s business operations. Chances are you will find the existence of an operations process that all but guarantees there is no chance at many any reasonable profit. I am a true believer in systems. Profitability comes from employing sound procedures that work even when you are not in the office.
David Saint-Onge is President and Principal Strategist for Black Ink Assets (www.blackinkassets.com), a business consulting company that enhances organizational performance, guides business growth, helps businesses understand productive sustainability, and serves business owners with effective business exit strategy planning and implementation services.
Published on Dec 1, 2010
Published on Dec 1, 2010
Entrepreneurs are risk-takers; this is the fundamental nature of leveraging everything you own to go into business for yourself. As entrepr...