Ray Silverstein's Blog

Horsing Around: Is Your Business an Old Gray Mare?

I recently had the opportunity to have dinner at an old, very well known restaurant in Chicago, the Cape Cod Room in the Drake Hotel.

The Cape Cod was known as the apex of seafood restaurants in the United States.  It had classic decor, responsive service and outstanding food.  This time around, the experience was different.  Thank goodness I had a lively dining companion or the evening would have been a total disaster.  Nowadays, the  dining room decor is dated, the service extremely slow and non-responsive and the food okay at best.

What does this have to do with small business in general and your business specifically?  It is an example of what not to do.  Do not take your customer and your market position for granted.  Do not let your brand deteriorate.  Do not let your service capability and responsiveness "go south." 

The Cape Cod Room was a premium restaurant with premium prices.  It is now an average restaurant with above average prices.  At one time, it was perceived to be a value.  The experience then was extremely satisfying and customers flocked there.  Now, the experience creates a reluctance to ever return.

In your business, what are you doing, every day, to enhance the customer experience?  Due to the Internet, it is much harder to create a WOW with your customer.  You should be thinking about your key customers and how to create the WOW.  You must have a strategy to make your company “top of mind” and build the personal relationship with your customer--even in a digital world.

A branding expert I know states that your brand is only as good as your last "touch" with your customer.  Small business does not have the marketing dollars to create a major brand, but does have the ability to create a brand within its target market (niche).  Small business does have the ability to be top of mind to its customers or get a last look if you’re a contractor.

Today, competent service is expected and is not a differentiator… unless the service is poor.  The result: you get left out!   Is service and responsiveness a keystone of your business?  You have the opportunity to make sure your organization has the right people to accomplish this.  There are lots of very good people available.  So, it is your responsibility to have the right people in place who are trained with good procedures.

The business environment is difficult, but now is the time to enhance your relationship with customers.  When business improves, companies with strong relationships with customers will reap the harvest.  Sow your seeds now.  Customer service is not expensive.  It is actually less expensive than poor service.  You don't have the rework, corrections, credits, customer hand holding and most important, lost customers.

In the small business owners’ peer advisory boards I facilitate, we discuss the attitude that management must have as well as the employees they need to maximize their business in a soft economy and to soar when the market improves. 

We are always concerned about getting new customers, but now is the time to make sure you retain your existing business.  Don't give your customers the experience I recently had at the Cape Cod Room.  Don't become the Old Gray Mare, or you may get a kick in the ass.

 

 

 

Are You Ready to Take It From Your Peers?

What’s one of the biggest challenges of entrepreneurship? Isolation! Cliché or not, it’s lonely at the top.

As a small business owner, you don’t have access to a board of directors. Chances are, you have no one to brainstorm with or challenge your theories. Sure, you can bounce ideas off your employees, but don’t expect an objective response.

The problem is, operating in a vacuum can skew your decision making and limit your growth. If your goal is to take your business to the next level, you need a springboard. For many entrepreneurs, that springboard is a peer group.

Small business peer groups, or peer advisory boards, have been around for several decades, and their popularity keeps growing.

A peer group consists of about a dozen small business owners/executives in non-competing industries who meet regularly to pool information and lend support.

Led by a professional facilitator, the group addresses a new topic each month, such as ways to cut expenses or attract new customers. The facilitator’s job: tap into the group’s collective wisdom, so members leave armed with new strategies and solutions.

Many small business owners get so caught up in day-to-day activities, they forget their most important job: company visionary. Peer group discussions force them to step back and take the long view.  

In addition, members can pose business problems to the group and solicit solutions. Usually, someone else has already dealt with a similar challenge, so they benefit from each others’ experiences.

Peer groups also enforce accountability, which is especially important during tough times like now, when entrepreneurs often have to take unpleasant actions. 

If you fit the following description, then chances are you’ll find benefit in joining a peer group: 

·        The ability to give and receive constructive criticism.

·        The honestly required to admit mistakes and share successes.

·        A desire to step back from everyday activity.

·        A willingness to invest one morning a month in meetings.

·        An open mind and desire to learn. 

If this interests you, investigate local peer groups. Most will let you “sample” a meeting for free. Sometimes, you need to try a few to find the right fit.

If you are in Chicago or Phoenix, contact me at Ray@propres.comto attend a free meeting.

The Survey Results are In!

 

We’re all intently focused on the economy these days. Many of us are curious to know how other entrepreneurs are handling the recession. For this reason, I recently conducted a “How Are We Doing?” survey among my associates and PRO peer group members. The results are in, and they’re pretty interesting. Here are the highlights.

 

Finding #1: Our outlook is generally positive! 

When asked what their experience has been during the last six months, 67% of respondents report that their experience was “not as bad as it could have been” or “we did surprisingly well.” While this question measures outlook rather than actual results, it’s good to know so many are in an optimistic frame of mind.

 

Finding #2: We wisely reduced expenses.

Many entrepreneurs took steps to reduce expenses. 25% laid-off employees; 20% cut staff through attrition and/or reduced work hours. Some respondents report that they also reduced fixed expenses such as rent and phone service.

Finding #3: We’re becoming more Internet-savvy. 

76% of respondents report they’re relying more on web-related activities, especially in marketing and sales. 42% reported that they either revamped their website or increased SEO activity. Others are using more email marketing and utilizing social networking media. Bottom line: the low cost of Internet activity is moving many companies to market more aggressively online.

 

Finding #4: We’re split on how we think our year will play out.

Asked to rate their business outlook for the remainder of 2009, the responses formed a near-perfect bell curve, with a slightly optimistic tilt. (36% of respondents weighed in at the middle, 37% say business will improve, and 26% were pessimistic.)

Finding #5: Entrepreneurs are most worried about cash, credit, and costs.

When asked to list the top three issues facing their business, respondents repeatedly identified three things: cash flow, credit availability, and health care costs. And when subsequently asked to state the three top issues facing the small business community, they identified these same issues. This is clearly what’s on most people’s minds.

 

In summary, we can learn a great deal from what our peers have to say, which is why I facilitate peer advisory boards in the first place. If you’re interested in receiving a detailed survey results summary, or in learning more about peer groups, email me at ray@propres.com.  

Vision: The World is Changing … What About Your Business?

It’s a new world out there, and if we want to stay competitive, small businesses can’t afford to do “business as usual.” 

For example, I know an entrepreneur who owns a karate studio. Despite the recession, he still requires that students sign-up for at least six months of classes. That worked just fine in the good old days, but it isn’t working now. Enrollments are plummeting, and so are his revenues. But he insists that “I have to pay my rent!” and refuses to change his terms.

But alas, something bigger already has changed: namely, his customers’ spending priorities. Parents aren’t willing to make long-term financial commitments when they’re worried about losing their jobs.

If Mr. Karate wants to stay in business, he’s going to have to acknowledge this reality and update his terms. For example, he could offer month-to-month memberships, or guarantee refunds if parents lose their jobs. Yes, he has to pay his rent. But isn’t it better to collect the rent money one month at a time than to blindly forfeit it altogether?

Now, what about you? Are you operating by obsolete “rules” that are holding you back? Perhaps it’s time to reevaluate your business, to approach it from an entirely fresh perspective. Here’s a few of the questions every entrepreneur should be asking:

• Who is my customer? Has my customer changed in the last two years, and how?   
• What are my customers buying, and why? What aren’t they buying like they used to?
• What are all the things I said I’d “never, ever” do or sell? Is it time to reconsider?

If you don’t know what questions you should be asking, email me at ray@propres.com for a free copy of my “Expand Your Vision” worksheet. The world is changing, and if you want to survive, you need to change, too.

Biography Ray Silverstein is a small business expert who specializes in helping entrepreneurs grow. He is president of PRO: President’s Resource Organization , a network of entrepreneurial peer advisory groups in Phoenix and Chicago. He recently took his own advice and expanded his business to include The PRO Alliance  —it’s the peer group experience, minus the peer group. He is also the author of “The Best Secrets of Great Small Businesses” and a columnist for Entrepreneur.com. You can reach Ray at 1-800-818-0150 or ray@propres.com.