Archive for category: CFEB

Centre For Enlightened Business

Backing Up Business Data – It’s Crucial

There’s no particular peculiar virtue in religiously backing up business data. It’s just that the consequences of not doing so are potentially catastrophic.

Many businesses feel secure that their data are reasonably safe. They have good anti-virus software or a firewall that will stop viruses getting into their intranet.

But there are other ways to lose information. Fire, for example, or flood, earthquake or hurricane. To protect against these risks, it’s necessary to not only back up data but to store the data offsite.

Anti-virus software offers no protection against outright vandalism. It’s not unknown for disgruntled employees to carry out subtle or not-so-subtle sabotage. And data can be deleted accidentally. Files, folders and even whole databases can be mistakenly emptied out with the trash.

Theft is another problem. Laptops are easily stolen and with them can be lost many megabytes of precious information. Power surges pose another threat. Lightning bolts or just engineering problems can fry a whole network, unless it is surge-protected.

Finally, as a computer hard drive gets older, there is an increasing risk that one day it will simply crash.

Some of these risks may seem small. But the size of the risk needs to be balanced against the size of the consequences. Imagine, for example, that all a company’s tax records went missing. What level of sympathy would the tax authorities be likely to show? Even if a single mailing list went missing, what is the potential lost income as sales and marketing opportunities are not taken?

Of course, when important data are lost and they cannot be retrieved, they are often recreated. But recreating data may take longer than creating them in the first place. It’s one thing to note down information after a phone call, for example. It’s another to have to remember that phone call a fortnight later and backtrack over all the issues and details.

Some businesses back up on a daily basis. Others may back up weekly. It really depends on how much information an organization can afford to lose and how time they can afford to spend redoing work.

Backing up does not need to be laborious. Software can do it automatically, storing files in another part of your office Intranet. It’s possible to backup through the Internet if you have a broadband connection. Backups can run overnight. The cost of backing up this way is likely to be less than a firm will pay in insurance. And backup is a kind of insurance as data loss has been known to close down businesses.

Small businesses with only a few computers can back up onto a CD-ROM. A single CD-ROM can store 600 MB and can be added to incrementally. This only takes a few minutes.

The general rule is that most computer users do not start backing up until something bad happens. It may be only something minor. Perhaps someone has spent an afternoon working on a document and forgotten to save, and the power goes off unexpectedly. Then, amongst the general fuming and recriminations, the importance of backing up data becomes obvious.

Article courtesy of RAN ONE:

Problem Solving – How To Do It

Problem solving is a part of life, especially in our businesses. How you go about it is often the most important determinant of the outcome you get. Here’s a step-by-step management process for problem solving that you can use the next time something goes wrong and you have to fix it.

1. Be sure you know what the problem is

Write down all the details you can about the problem. What it is. What caused it. What it’s doing or has done to your business. Define it as clearly as possible and state everything you know about it.

2. Assign a priority to it

Some problems are urgent and others have a more flexible timeline. Write down everything you can about the time factors relating to the problem. Determine whether the problem needs to be solved today, this week, or this month. Also define what will happen if you don’t solve the problem.

3. Check the measurements

Quantify any aspects of the problem that can be represented numerically. If it has a financial impact on your business make an estimate of how much it will cost. Also estimate what those numbers will be if the problem is solved.

If not solving the problem for a period of time will make the measurements worse, project these over the anticipated time before you will have solved the problem.

4. Share the problem

When you have completed the first three steps you have a clear picture of the problem and are ready to enlist the help of others. Business problems are best treated as a team issue, so assemble a team to help you find the solution.

Choose people that can bring their own problem-solving skills to the project. Make them the owners of the problem and challenge them to solve it. (Even if the problem-causer is among this group avoid recriminations and just focus on the solution.)

Review the first three steps to make sure you haven’t missed something or made a miscalculation. Everyone must agree on the dimensions of the problem before proceeding.

5. Agree on what will identify a solution

How will you know that the problem has been solved? Everyone working on finding a solution has to have a clear goal in mind that represents that solution. Define this as carefully as you’ve defined the problem itself.

6. Manage the solution process

You’re now there to manage the team in their efforts to find a solution to the problem. Become the focal point for information gathering and communication and manage all aspects of the project including scheduling and meeting deadlines.

7. Don’t just fix the symptoms

Many business problems manifest themselves with symptoms that can be wrongly perceived as the problems themselves. As project manager it’s your responsibility to ensure that the real problem is pursued to the point of solution and not just the symptoms; fixing the symptoms often helps to mask the real problem.

8. Honesty is the best policy

You may find that the resources at your immediate command are inadequate to solve the problem. If this is the case, be wise enough to admit it and call in help from outside the organization.

Refocus the team’s efforts on finding a source of the solution somewhere else. Keep the team together so they can evaluate the proposed solutions received from elsewhere.

9. Choose the best solution

Assuming that your team has agreed on a solution for the problem you need to make sure it’s not only going to work but is also the best solution. Check and double-check before you implement any solution to be certain it will be the most effective answer to the problem.

10. Thank and disband the team

Make a final report to the team that has solved the problem and tell them how you appreciate their contributions. You can now officially disband the team and remove this particular problem-solving task from their list of responsibilities.

Article courtesy of RAN ONE:

Play To Your Strengths

Every person is a combination of strengths and weaknesses. We’re only human and so we usually spend far too much time worrying about our shortcomings and too little time leveraging our strengths.

That’s hardly a positive approach. Owning a business is stressful at the best of times, and we should do all we can to reduce our quantum of worries so we can better cope with the demands and responsibilities of management.

If you start leveraging your strengths you’ll find you have a lot more time and energy to deal with issues in your life. You’ll be doing the opposite of worrying and just like the song says: “Accentuate the positives, eliminate the negatives”.

Start by working out what your strengths really are. Make your own appraisal of your talents. What sort of thing do you do best? Look back on all your successes and remember what made you successful in each case.

What do you really love doing? What kind of projects gives you a lot of pleasure? This is the type of work you should be doing because you’ll do it well and it will make you a happier person.

What do others ask you to do for them? You could be really good with computers, or at fixing broken appliances. You might not even think much about what you do to help other people but chances are pretty good you’re seen as an ‘expert’ at something.

Ask your friends and family what they think you’re good at. After the usual banter you may be surprised to find they think you’re good at a lot more than you ever knew.

Now use your imagination to come up with things you know you could do if you just took the time or had the opportunity to do them. Whether it’s something in sport like the perfect ‘300’ game of bowling or perhaps playing championship chess, there are always options we just haven’t tried – yet.

Think about the jobs others have that you feel sure you could do equally well. It could be the head of your local chamber of commerce, or perhaps the CEO of a large manufacturing company. If you can imagine yourself in those roles it’s another guide to what you enjoy doing.

And on the flip side!

There’s another side to this process that’s not as much fun but just as essential, and that’s finding out what you don’t do well. Those same friends and family who told you what you’re good at doing can also tell you what don’t do very well. No matter how distasteful this may be, it’s the kind of information you have to know.

Ask yourself what are the areas where you’ve performed consistently poorly. Identify where your best efforts have achieved the least and where your frustrations led to failure.

If you persist at trying to do something that you can’t do well you’re wasting your time and energy in a fruitless cause. It’s far more practical to base your activities on your strengths and not your weaknesses.

Now it’s time to apply what you’ve learned. Remember that nobody’s good at everything. Get rid of the responsibility for doing something you don’t do well by either having somebody else do it or letting technology handle it instead of you.

Most business owners wear many hats – too many, usually. It could be time to consider handing over a hat or two to an outside contractor or even adding a part-time team member to take over functions you’re not handling well.

You might even be able to find somebody whose strengths and weaknesses complement yours – they do well what you don’t, and vice versa. What a team you’d make!

From this point onwards make a decision to focus on your positives and base what you do in business on what you are best at doing. You’ll have a higher success rate in everything you do and won’t be dragged down by failure because you’ve minimized your chance of meeting it again.

Article courtesy of RAN ONE:

Easy Time Management

Every person in every organization is well aware that by adopting even the most basic time management techniques they can become more effective, and hence more productive. Even if they don’t actually do it.

For accountants it is especially important. They have to be able to bill accurately and profitably, and missing an important external deadline (such as a tax return lodgment) through being disorganized can obviously be very damaging to the business. There is nothing quite like the end-of-financial-year rush to make one swear to be more organized next year.

The vast time management industry is predicated upon the fact that the pressures to perform are becoming more and more intense each year, and that there are only 24 hours in a day and 168 hours in a week.

Nightmare statistics abound, such as the horrifying news that executives on average spend a total of three years of their working life in meetings, and two years playing telephone tag.

The mystery then is why only a few people are able to manage this rarest and most precious of business resources effectively.

Even more so, when the benefits arising from effective time management include giving a structure to the business day, and peace of mind through knowing that goals benefiting the business are being met.

It also increases productivity, ensures that nothing slips through the gaps, and engenders a feeling of accomplishment and well-being in the organization. In addition, stress levels are reduced by avoiding crises.

Ohio State University in the US has classified the major time wasters into external and internal categories. By looking at these it is possible to establish the cause of an individual’s lack of efficient time management and pinpoint the old habits that need to be broken.

The external ones are: telephone interruptions; meetings; visitors; socializing; lack of information; excessive paperwork; communication breakdown; lack of policies and procedures; lack of competent personnel and red tape.

The internal ones are: procrastination; failure to delegate; unclear objectives; failure to set priorities; crisis management; failure to plan; poor scheduling; lack of self-discipline; attempting to do too much at once and lack of relevant skills.

To overcome these time wasters, employees must not only change their behavior, but also maintain and persist with it.

Self-discipline and control is needed to ensure that behavioral changes will become habitual.

However, a sense of balance is also needed – there is no need to be too rigid, as the classic time management rules don’t work for everyone. There may also be some elements of an individual’s work that cannot be controlled, or don’t need to be controlled.

The basic techniques are actually very easy and, once the systems are set up, don’t take much time.

The first step is to keep a log that will identify the applicable causes of time wasting and those tasks which are unimportant. Delegation is one of the key principles of time management, and this log will also identify what can be delegated.

The next, and most important, step is to set the goals that need to be achieved, and then prioritize them. By doing this, time can be allocated to the most important objectives.

Once the goals have been set and prioritized, daily “to do lists” can be drawn up – ensuring that sufficient time is allocated to the major projects. It is also worth remembering the 80/20 rule, i.e. that 20 percent of projects normally account for 80 percent of a firm’s revenue.

Additional ways to manage time include: using technology as much as possible; utilizing shortcuts wherever possible; investing in education and skills training, and buying planning tools – but only if they will be used.

For accountants dealing with clients, it can also help to clarify all details at the outset; identify the decision-makers and stakeholders; analyze their culture; effectively manage meetings; and regularly request feedback.

The basic elements of time management are therefore relatively simple. There is no need to spend huge amounts of money on fancy systems or programs. The hard part, as ever, is actually putting the elements into practice. The only solution to that is to start immediately, and to remember that no one has ever successfully managed their time without at least writing down a “to do list”.

Article courtesy of RAN ONE:

Brainstorming And How To Use It

Every organization will benefit from an input of fresh ideas. These can be about products, services, promotions, packaging, human resources – any aspect of an enterprise.

Even if you don’t have any pressing problems to solve at the moment, it’s always healthy to give others a chance to have their say about your business.

One of the best ways to come up with new ideas is through the use of brainstorming. It may sound like an intellectual free-for-all but that’s not the case. Properly used, regular brainstorming sessions will tap into a wealth of great ideas that may otherwise have gone undiscovered.

Step 1

First you need to assemble a group of people to brainstorm with you. Everybody has a creative side so there’s no need to rigorously structure the group. Your friends, other business owners, your suppliers and even your next door neighbors all qualify as ‘people’ when you’re putting a brainstorming session together.

Another really important point is that everybody in a brainstorming session is an equal. Each participant should be encouraged to speak up and not be concerned with such things as age, titles or experience in a particular field.

Keep the size of your group fairly small. Try for people who are reasonably outspoken and can get along well together. The intention is to form a group that will meet on a regular basis for short periods and throw out ideas on something to do with your business.

Brainstorming works well as a four-step process with you as the facilitator or leader of the group. Step one is to generate a quantity of ideas for consideration. These can be as sensible or wild as may be; we’re after quantity in step one and the quality comes later.

Begin by stating a goal for the meeting. It might be ‘to find a better way to deliver pizzas’ or ‘to get some ideas about new items to stock for Christmas’. It can even be as vague as ‘to make customers happy’ or ‘to make more money’. In brainstorming any topic can be given the treatment.

Go around the room and get ideas from members of the group. It might start slowly and if suggestions aren’t readily forthcoming ask a particular individual for their thoughts. Once the group’s dynamic is activated things really start to happen.

Record every suggestion on a white board so none get overlooked. If you don’t have a large whiteboard just tape pieces of paper all over the wall. Neatness doesn’t count when the creative ideas are flowing. The ideas and notes have to remain visible to everybody in the group.

Step 2

Step two is to evaluate the ideas from step one as quickly as possible and narrow them down to a manageable number that the group generally agrees has some potential for application. This isn’t as hard as it sounds since you’ve already begun to tap into the collective mind of the group and everyone’s started to look at the list and form their own thoughts on those topics.

Step 3

Step three is a discussion of each of the remaining ideas one by one. These ideas have now become the property of the group and every member is encouraged to take part. Here are some rules that will make your brainstorming session deliver better results.

• Suspend judgement and stay with the positives. The ‘bad’ ideas have already been ruled out so look for the good in each of the ideas you’re discussing.
• Give each idea a quick makeover. What can be done to make it bigger, better, stronger? This is where you add value to an already good idea. Write everything down as before.
• Don’t let costs or what you might think of as practicality get in the way. You’re only concerned with the quality of the ideas themselves.
• Put a time limit on each idea. Every idea is equal until it’s ruled out, so give it three or four minutes and keep an eye on the clock.
• Two or more ideas can be combined if that’s the way to make them work best. It’s also acceptable for a new idea to be based on an earlier one. No individual has ownership of any idea at this stage.

When every idea has been covered and the group’s suggestions noted, ask them to agree on the best five or six ideas that have survived the process. It might require an exercise in democracy (take a vote!) but this is the final responsibility for the group to undertake.

Now it’s time to thank them and break out the coffee and doughnuts or whatever else is appropriate to reward them for their contributions. Make it a good social occasion and you’ll have a better chance of getting them back again.

Think of the value of what you now have in your possession. You’ve managed to identify five or six really good ideas about your business that are the product of several minds working together. That’s brainstorming in a nutshell.

Step 4

Now it’s time for step four. You have some independent work to do after everyone’s gone. Take the five or six winning ideas and put them through your own process of analysis.

Think of the negatives for each idea. Now you can give consideration to such things as costs and whether or not the ideas are practical for you to implement. Look for faults and flaws and be as harsh as you can.

Next, see if you can overcome these negatives. Some ideas will literally scrap themselves because the negatives far outweigh the positives. Eventually you’ll wind up with a few really good ideas that are both affordable and practical. These are the gems you’re looking for.

Conduct some research on each of these ideas and see if you can find out what others have done with similar ones. The internet is very helpful here – put the keywords into Google and see what comes out. You may find that somewhere in the world others have taken the same ideas and done some really great things with them.

At the end of all this you’ll come out ahead, but only if you actually implement the ideas you’ve generated through brainstorming. If you’re doing something that you’ve never tried before, give the group a chance in future sessions to help with monitoring the idea’s progress and helping you overcome any teething troubles.

Incidentally, brainstorming also works well for problems. The process is about the same as looking for good ideas, but in this case you propose a problem or problems to the group and the target becomes one of finding solutions.

Hold regular brainstorming sessions with the same group and you’ll find things run even more smoothly once everyone gets used to working together. Just be sure to show your gratitude for their efforts and keep them informed of your progress with their best ideas.

Brainstorming is really just a structured approach to the generation of ideas that works because it doesn’t allow preconceptions and negatives to overcome creativity.

Give it a try and see what comes out of it. You never know what’s going to happen but you can be sure it’s going to be interesting.

This article was originally published in the April 2004 edition of ONEderings ezine.

Article courtesy of RAN ONE:

How Your Small Business Can Survive When A Giant Moves To Town

The arrival of a big conglomerate often serves as a kiss of death to small businesses. For how can you compete with these giants in the face of the vast technological resources, deep pockets, seasoned management, and the powerful brands of, say, a Wal-Mart, Kmart, Tesco or Home Depot? But as a small business you […]

Succession Planning

Don’t forget your own succession plan

Accountants are becoming very familiar with succession planning, and many have established themselves as specialists in this fast-growing area. But it’s important that they aren’t so busy doing succession plans for their clients that they forget to prepare one for their own firm.

Statistics indicate that one in three partners of firms with less than $5 million in annual revenue will turn management of their business over to new hands within the next five years.

For many accountants the value of their practice is their most valuable asset. It’s also the most likely source of the funds that will support their retirement. However, more than three-quarters of accountants replying to a 2004 PCPS poll said they didn’t have a written succession plan in place. Providing for retirement benefits would still pose a challenge for 46% of the firms.

Another survey conducted by the Member Service Group of the Canadian Institute of Chartered Accountants (CICA) found that nearly half of practitioners said they will retire from their businesses within the next ten years — and yet 62% of the respondents either do not have a succession plan or are not sure if they have one. Of those who do have a succession plan, only 22% have one in written form.

“If you’re a sole practitioner, don’t wait to get a plan in place,” says Donald Scholl, a West Chester, Pennsylvania, management consultant to the profession. “While it is rare, some CPAs have needed a plan to manage a practice transition while they were relatively young.”

Who will replace you as the head of the firm?

This is an important question because this person must be able to keep the business running well so that your payouts can be made on schedule. Ideally this person will be someone from within the firm whom you can mentor and nurture in preparation for their replacing you.

Not every accountant has the entrepreneurial drive or management ability to run a practice. The role also requires leadership skills and the ability to deal with clients – a much bigger list of requirements than simply being a competent accounting practitioner.

Writing in the Ohio CPA Journal, Bob Bates, a partner with Crowe Chizek in Indianapolis, Indiana had this to say about leadership transition: “Leadership transition may receive the least attention of the three components of succession, but I view it to be the most critical component.

“Without leadership for the organization into the future, all the best estate and ownership transition plans may be of little use.”

In November, 1993 Seattle-based accounting firm Moss Adams LLP named Rick Anderson to succeed Robert Bunting as CEO in June 2004, but the process of planning the succession had begun many years before.

Anderson joined Moss Adams in 1973 and rose through the ranks to become the firm’s president and chief operating officer. When he took over as CEO of the tenth largest accounting firm in the U.S. he had already had twenty years of experience with the firm and had been carefully groomed for the top job.

There’s a rule of thumb that says it takes at least five years to prepare a successor to take over the role of heading up a firm. The right person has to first be found, then groomed for the job, and the sooner the hunt begins, the better it will be for your own personal welfare.

Start planning years ahead

Succession isn’t something that can be planned quickly Regardless of the size of your practice, planning should be commenced years ahead of the intended date to be sure you receive the highest possible benefits when you leave the firm.

Quoted in the Journal of Accountancy (March 2002), Jody Davis, CPA who is an authority on small-business succession planning issues, says: “Most small-business owners don’t have an exit strategy. They just don’t want to deal with it until it’s too late–and that’s just as true for small CPA firms.

“Principals should start succession planning sooner rather than later – that is, a minimum of 10 years before a senior partner’s proposed retirement to allow enough time to look at all the transition and funding possibilities.”


Article courtesy of RAN ONE:

Being A Team Player

Poor relationships within the team will always reflect on morale and have been proven to impact on the bottom line. You can make or break a career or a job depending on the way you behave with fellow workers. Workplaces need to be profitable for businesses and for the people in them – and that means personally and financially.

Whether you are a leader or a team member there are actions you can take to create a positive, empowering, motivational work environment for people.

A CEO complained that his managers only brought him problems. When you come to the meeting with a problem, have some suggested solutions ready at the same time. The negative effect simply complaining disappears, and is replaced with an atmosphere of constructively sharing in resolving issues.

Constantly laying the blame on someone or something else is negative and often destructive of team spirit. Don’t put your effort into finding ways to point the finger at others. People are more likely to recognize their contribution to the problem if they are not publicly humiliated in the process. You will alienate others and end up with enemies, not conducive to your future job prospects or your business’ success.

It’s not just what you say; it’s also how you say it, and the message that your body language conveys. Apparently polite words won’t cover up for disrespectful or rude actions; sarcasm, shouting and other aggressive behaviors are never acceptable communication methods.

The middle of an important meeting with clients or senior managers is never the right time to reveal problems that your co-worker, boss, or reporting staff person is not aware of. Sometimes called ambushing, no-one wants to be humiliated by learning of problems for the first time in a public forum. They won’t respect or trust you in the future.

Be reliable. Keep your commitments. Like the walls of the honeycomb, we are interconnected in a business. If you miss your deadlines, it will impact on the work of others. If you can’t meet a deadline, let others know quickly so that alternative arrangements can be prepared.

Be generous and share credit for accomplishments, ideas, and contributions. When you think about it, virtually everything we achieve comes about as a result of input of some kind from others. Thank people, and acknowledge their contributions. Employees and co-workers will be more motivated to share ideas with you and contribute to your projects (and to your success).

Everyone has something to offer if we encourage them to share it. The growth of one person benefits the whole group. So compliment, praise, notice the efforts people make.


Article courtesy of RAN ONE:

Audit Your Standards of Customer Service

So much is said in retailing about customer service but not enough is actually done about it. The goal of every retailer should be to deliver truly outstanding customer service but management in most stores – even the major chains, have no idea about the level of service they’re providing to their customers.

Customers will only come back to a retail outlet if they get good service. To put it another way, poor service is a guarantee you’ll lose customers. Since it takes about five times as much effort to get a new customer as it does to retain one it’s well worth the investment it takes to raise your standards of customer service to the highest possible level.

Giving outstanding customer service has real economic benefits for retailers. It means you don’t have to discount heavily to attract new customers, nor will you have to spend a fortune on advertising.

You need to look closely at the level of customer service your retail establishment delivers. Don’t look at it from your point of view but put yourself in the place of customers who don’t know the location of every product in the store, who don’t know all the details – colors, sizes, etc. of products you sell, and who don’t know the sales team on a first name basis.

Remember too that customer service is about your whole store. It’s about the people, the premises and the total impression that customers receive.

Your people

Start by taking a good look at your team members. Do they all have a real customer service focus? If a customer is ignored or treated with indifference, perhaps even rudeness, chances are you’ll never hear about it. They’ll just go away and never come back.

Finding the right people for your sales team is the best way to deliver outstanding customer service. It’s up to you to select those with good people skills, and some just don’t have them.

No matter how smart or polished a person is, if they can’t instantly relate to your customers they should not be the interface between your store and the public.

There is a golden rule about customer service that never changes: The customer comes first. Remember that and make sure everybody on your sales team knows it. That really does mean ‘first’ – not after stocking a shelf or when the phone call’s finished, but absolutely number one first.

Are customers recognized and offered assistance immediately? Do they have to come to a counter to get attention or do members of the sales team go out to them? Watch carefully and see what really happens. If customers aren’t being treated like the valuable guests they are your sales will suffer.

Anyone on your sales team that won’t accept this principle doesn’t belong there. To some degree a less than perfect attitude can be corrected by training but it’s far better to be selective at the time you’re choosing sales team members than to try to correct a staffing mistake later.

It’s worth paying a market research firm to conduct ‘secret shopper’ surveys and get an objective opinion on each key member of the sales team. The returns on this investment come back immediately.

Your premises

Next, look at the physical attributes of your premises. It’s an important part of the customer experience and is another contributor to customer service.

Ask some people who are representative of your typical customers to take you through the store and make comments on everything they see that needs attention. Get their honest opinions of:

▪ Store lighting
▪ Displays
▪ Merchandise selection
▪ Store layout
▪ Colors of walls, carpet, etc.
▪ Appearance of sales personnel
▪ Temperature of the premises
▪ Location
▪ Parking, toilet facilities

You may find that your store’s appearance has become tired or dated. You may find the facilities aren’t up to the standards of those offered by your competitors. It’s certain you’ll find something needs fixing that you weren’t aware of because your customers notice a lot more than you do.

Your external contacts

How does your store perform from the outside? That means checking out your telephone service and your website, if you have one. Your opportunity to deliver outstanding customer service begins at the first point of contact between your store and a customer and that’s often an electronic one.

Do you know how your team handles a customer’s telephone call? They know your voice, naturally, but if you ask someone to call in with a simple inquiry about a product you stock you’ll know how a typical customer is handled.
Ask three or four people to call your store and tell you about their experiences. You may find some telephone training is needed.

The same goes for that website you spent so much money on. Is it really customer-friendly? Does it look as good as the competition’s? Does it work like it’s supposed to? Don’t try and judge for yourself but get others to take a look at it and get their opinions.

When you’ve seen how your people, your premises and your external contacts work to deliver customer service, ask yourself the big question: “Is my customer service outstanding?”

Retailers that don’t answer ‘yes’ to this question need to act immediately to fix whatever it is that’s holding them back. If you can’t answer ‘yes’ but your competitors can, where are your customers likely to go for their next shopping experience?


Article courtesy of RAN ONE:

Understanding Your Competitive Edge

Analyze the competition and get ahead

Author and futurist Charles M. Perrottet identified two types of businesses – eagles and ostriches. The eagles analyze their competitors and assume their competitors do the same to them. The ostriches don’t look around them and remain focused on their own activities without regard for anyone else.

Most businesses don’t know enough about their rivals to anticipate the moves their competitors are going to make. In short, most of them are ostriches. Very few businesses will optimize their profitability without a basic awareness of their competitors’ activities and operations but far too many try.

Competitor Analysis (or ‘CA’) is an in-depth analysis of one or more rivals. This involves gathering information on how they’re structured, how they operate, who their people are, their strengths and weaknesses, and what they’re likely to do in the future.

It’s this kind of information that can be used to make decisions about your own business – emulate the best aspects, avoid duplicating the mistakes of others, and plan your own future so that you’ll come out on top.

To be really good at CA means that you’ll know almost as much about your competitors as you do about your own business. This is expensive and time-consuming as you’d expect so most businesses compromise and do a job that’s less than perfect but hopefully is still adequate.

How far you go towards full CA will be determined by many factors. You might do just the minimum and collect your rivals’ literature, visit their websites, sample their products, monitor news articles about them, and possibly talk with some of their customers and staff. This will at least give you an idea of what they’re up to.

The four basic steps of CA essentially involve identifying rivals, performing a SWOT analysis on them, then feeding this knowledge back into your own business:

1. Identify and learn about your competitors
2. Analyze their strengths and weaknesses
3. Identify their opportunities and threats
4. Relate this knowledge to your business

Identify and learn about your competitors

If you think you don’t have any competitors you have good reason to worry. If nobody else thinks your line of business is a good idea you might not be in it for long. Chances are that you do have competitors and you need to know what they’re doing.

Think outside the square. For example, a professional services firm offering immigration advice has lots of direct rivals. Some are up the street, some are on the internet, some work for government bodies (your competitors don’t always charge for their services), and some are in other countries.

Look first at those who dominate your market – the big brands, the big names. Then go down the chain to the others supplying your market. Always ask: “Who else can give my customers what I sell to them?” and then you’ll start identifying all your competitors.

Be aware too of those who are potential competitors. Growing market segments are an invitation for established firms to expand into them and it’s unwise to assume you’ll have anything to yourself for long. Who has the ability to become a competitor? Add them to your list of rivals.

Analyze their strengths and weaknesses

Here’s where it starts getting hard. Each of those rivals or potential rivals has strengths you need to analyze to see if they can be developed in your business. Why do their customers buy from them? What makes them successful? It could be their products or it could be their marketing. What is it?

Then it comes down to finding out what their weaknesses are. Are their prices too high? Are their locations poor? Perhaps their products are inferior to others in your market. If you know their weaknesses the chances are they do too, which can be a guide to their future actions.

Identify their opportunities and threats

These are outside factors and will mostly be your own opportunities and threats as well. An example is the advent of the internet on traditional retailers. For some it was a threat but for most it became an opportunity.

For a while the hype screamed that ‘bricks and mortar’ stores were going to be superseded by a new breed of web-based retailers but as we now know it didn’t turn out that way. Using CA the traditional retailers quickly expanded into having their own websites and online catalogues, effectively shutting out most of the newcomers and riding out the storm until it blew over.

Look for any outside factors that could affect your business. These factors could be driven by technology, the result of new legislation or even the development of a new product.

Some will be opportunities for you to grow your business and others will be threats that could mean you have to adapt or lose some of your market. As long as you’ve identified them you possess the knowledge you need to make decisions about your future.

Relate this knowledge to your business

You’ve identified your competitors and know their strengths and weaknesses. You’ve also determined the opportunities and threats out there in the marketplace. Now it’s time to work out what you need to do to drive your business where you want it to go.

Start by doing a SWOT analysis on your own business. Look at such elements as your pricing, your operating costs, your marketing and your ability to change to meet the competition. How do you stack up?

What your competitors are doing right you can do as well. If you’re also doing what they’re doing that’s wrong, stop doing it. Fine-tune your business so that you can take advantage of the opportunities out there and not be injured by outside factors that threaten your success.

Be an eagle and you’ll never have to worry about the ostriches!


Article courtesy of RAN ONE: