strategy

What 1 Question Gets You the Right Consultant

Hiring the most relevant consultant to your business or industry is key to making changes within your company and making them efficiently. Turning processes around, creating relevant data and formulating meaningful financial information lie at the core of any business change.

The most important question is “What is your experience?”

It’s not just about consulting experience, but also hands-on, real practical experience doing what they will do for you. While the consultant

may have extensive experience, the people he sends you must as well. Experience is a result of years doing the work, the management or the financial control of a company. If the consultant they send looks like he or she is 26, the chance of their having years of experience greatly diminish. On the other hand, if you hire an IT consultant, that could be an advantage.

Bonus Questions

So here’s the rub.  If you hire an experienced consultant, will they know the current trends in business? What a great question to ask! How about, “What strategies have you recommended to businesses who are challenged with rapid growth?” “What fast track strategies have you suggested for the business office trying to keep up with uncontrolled growth?” Or to be more specific, “What software changes have you suggested when invoicing falls too far behind?”

These are questions specific to your goals. An experienced consultant who has kept up with current products and trends will more likely be able to help you resolve this.

Your savings will come in time (money) saved by the consultant and your business. The quicker you can resolve your situation, the quicker you’ll be saving. Remember as well, you need to dedicate a team of employees to work through this.

Consultants save you money in the short or long term.

Succession – A Case History

A 70’s thriving business is not a guarantee of a 90’s success.

A medical widget supplier did a wonderful job of starting a vendor business of medical devices. After all, he had formerly been a user and installer of these products himself; he saw the need for a supplier to furnish these devices locally. So, he started his own business.

From the start, the demPeople talkingand and need was validated. Business got off to a fast start and the pace never slowed. Hiring became essential and a growth from 2 to 10 employees happened quickly. With the growth came a good reputation and recognition in the business. Deliveries were timely, products had quality and receivables were worked out with all customers. If a customer needed a little extra time, he got it. The company participated in trade shows, professional organizations and donated generously to non-profits.

Of the employees, one was the owner’s son. He had come on board to help out and ended up staying. His place was at the counter for sales. He had not gotten that position because of his personality. The other employees worked around him to maintain satisfied customers. The time came to hire an outside sales representative to seek new accounts. The new representative was experienced in the field and was able to make technical referrals to the customers. In the 80’s and 90’s the business flourished. In the late 80’s, the owner and founder of the business died unexpectedly. The family was devastated and the employees were left wondering “what next?” Customers paid their respects but expected no changes in service.

The family grieved but with the support of a few key employees, was able to pull it all together to keep going. The founder’s wife came into the company as a bookkeeper/controller to keep track of the financial aspects.   As the economy recovered from the recession of the early 90’s, business grew. The outside sales representative was promoted to president of the company since neither the son nor the wife were viable figureheads for the leadership role. Another outside sale representative was hired. A side consulting business was formed that would make recommendations to clients for specific products to use in special cases. The consulting business returned higher profits which in turn boosted the company bottom line.

A few obstacles were encountered. There had never been a succession plan, after all the owner was not that old. He had not spent any time grooming anyone to take over. The son, who was not ambitious to begin with, was not a likely successor. The wife was not technically knowledgeable of the products and was not interested in leading or managing employees. She was not one to move the company forward. The newly named president had limited power. He had no control over the finances which left him responsible for overseeing employees and customers. Through all this, the company moved forward without much being said. Employees were in the dark.

By the mid 90’s, the wife was in her 70’s and her energy level was diminishing. The concept of growth did not interest her as she preferred keeping things simple and easy.  Her work days soon became ½ days and part of those was napping at her desk. The wife died and left everything to the son who didn’t have a clue about what to do.

The company became lethargic and attitudes took a nose dive.  Inventory shrunk and product availability grew sparse. Employees began seeking other jobs and when business became anemic, he decided to find a buyer. The timing couldn’t have been worse. Another recession had started and the value of the company dropped. He wanted out so bad, he took the first marginal offer that came his way and sold. The company sold for roughly half of what it had been worth at one time and with inaccurate inventory data, he was left with nothing at the end.

Succession planning is essential. Whether the transfer is to a family member, an employee or outside parties, maintaining the value and growing the value of a company are essential to survival in today’s business world. Customers look for continuous improvement, employees look for continued stability and successors look for an opportunity. The strategy of continuance is one that can be worked on daily for short term and long term success.

Leading Edge Business Strategies, LLC is a consulting firm for small business. Paul Beaudette is the President and has over 30 years of successful business experience managing companies to sustainable profits and leading employees to productivity and efficiency resulting in growth and profits.

Contact us at info@leadingedgebusinessstrategies.com

 

What Will Your Profit Margin Be This Year?

Did you predict an end of year profit in January?

If you didn’t, why not? What are you afraid of? What do you fear will happen if you throw a number at it and don’t achieve it? Or, what if you surpass it?

Every year we hesitate to forecast the numbers for the next year. Why? Let’s look at it:

  1. Do we feel the whole process is out of our control?
  2. Are we dependent on the economy?
  3. Are we dependent on the stock market performance?
  4. Does it depend on how certain employees will perform?
  5. Does it depend on how you’ll perform?
  6. Will the government shut down and affect your business?
  7. Are you vulnerable to a supplier on the brink of a buyout or failure?
  8. How about your biggest customer, are they on the fence with switching to another company?
  9. Is global competition going to price you out?
  10. Are you unable to find qualified help?

These are all very valid concerns that all businesses face. The question is, should they affect our outcomes? Sure, they make affect our volume in revenues, but depending on how much control you have over your company, they should minimally affect it. Your profitability is controllable. You just need to ask yourself the right questions, contemplate different scenarios and develop strategies for each that protect your profitability.

Leading Edge Business Strategies is offering a 15% discount for any company that wants to guarantee their bottom line for 2017. This package includes coaching for budget development, scenario creation and strategy formation. You’ll be provided with a monthly budget that you can use as a road map for your business throughout the year. You’ll have predictable monthly profits to use as benchmarks and be able to make adjustments as you work through.

Make this year a year of predicted success. Call today for a free consultation and quote.

(207) 577-1948 or email: paul@leadingedgebusinessstrategies.com .

Quotes are based on company size, number of employees, revenues and sales structure. All quotes are written showing fee, discounts and net payable amount.

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Sneak a peek at my answers to the questions above on page 2.

Suggested answers to questions from page 1:

  1. No. The process of developing a budget should be completely in your control. You have the reins of everything about your business. If you don’t, who the heck does? It does not  just happen. You make it happen.
  2. No. When the economy improves, our revenues go up and vice versa. Our profitability can remain the same when we take those reins and control the horses. With enough planning, your profitability should improve when the economy improves, but profits should not go down when the reverse happens.
  3. No. The stock market affects investors. It influences how people think about the economy. It scares people when it nose dives and makes people happy when it skyrockets. But pay attention to what you do best in your business and your customers will keep coming.
  4. No. If it does, sell them the company. They should not have that type of control over your bottom line.
  5. Yes. You are in charge and have the power to affect your bottom line.
  6. Yes. It’ll affect your revenues (income) but you still have control of your profitability. Make adjustments. I know that’s not easy.
  7. No. You should know your supplier well enough if that will happen. Make a decision if that should be your supplier going forward if that is the case.
  8. No. Just like your biggest supplier, know your biggest customers as well. You should know most of your customers well, but know them like family.
  9. Probably. What is your strategy ‘in case’ that happens? Be prepared for your competition making changes.
  10. No. Treat your help fairly and pay then well, offer them good benefits and they’ll take care of 1 through 9 by default.

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Have YOU had Your Customers for a Sleepover Yet?

But, it’s good customer service!

Getting and keeping customers today is harder than ever. When opportunities arise to WOW! the customer, you need to jump on it immediately.
Take a look at this story of an opportunity that presented itself in what could have been a dire situation for both the customers and the employees. But the lead manager of the John Lewis department store in London made lemonade.
This inspiring story is delivered in this fun Prezi as you follow the adventure of an open-minded, risk-taking manager (Deborah), who did what was right for the customers, all 100+ of them.
Ask yourself, would you stick your neck out to do this? The last few slides say it the best: “It shows that great service isn’t a set of rules, it’s a mindset.”

Use right and left arrows at the bottom to view presentation at your pace. Some slides have sound, not all.

Listen carefully to Deborah as she describes the experience. Find the key culture characteristics that drive this behavior and how as a manager, she was totally comfortable in doing this at a cost. How does that culture become not only unquestioned, but supported by senior managers? And note the enabling, not constraining nature of the effort.

“Sharing your customers’ problem and doing all you can to help solve them.”

Share your customer service hero experience here.                          

Small Business vs. Unlimited Guarantees

“Is the customer is always right”?

In reality, is the customer always right? No, not really. Many customers have taken advantage of that adage and have started using it to get something for nothing.

This mindset has occurred as corporations  have extended warrantees for longer terms and in some instances for a lifetime. The wording of such warrantees varies as to what constitutes a guarantee-able cause. Some are unconditional.

Why have companies made these promises to repair or replace their goods with such risk? Well, they either believe their products will last that long, they are desperate to compete on something other than price or they are playing the odds that most people will not return their purchases. All of these have associated costs that you pay for upon purchase.

What has gotten customers (a minority that is growing) to this point? Why are customers willing to lie to get “free stuff”? Retail clerks tell stories of products returned way past their guarantee expiration and with elevated tones decry the failure of the products until they have talked to higher ups and gotten what they want. Are their claims legit? Sometimes yes and sometimes no. They just know that if they scream loud enough they’ll get what they want.

With online and telephone (mail order) purchasing, it gets even worse. Without face to face contact on a return, theReturns line elevation of tone, the assertiveness of conversation and the “I won’t take no for an answer” speech can become
belligerent and often does. Lacking eye contact and the emotional connection of a personal conversation, the clerk on the other end of the line seems less human. Getting your way results in a freebie. The caller goes away swinging high fives while the clerk on the other end feels diminished, defeated and demoralized. After all, this is the company he works for, the products he believes in resulting in a desire for combat pay.

Big business created this practice

Companies have that right to offer any extended warrantees they wish. The do need to live up to them. They also need to spell them out completely. If a $10 billion company makes $800 million in profits, they can afford to risk a 7-9% return rate without affecting the bottom line much. They may get added business because of their warranty which will more than make up for the return rate. Returns may be resold at discounted prices if not damaged.

How can I as a small business compete?

Small businesses that resell products can live by their product manufacturers’ warrantees. If they provide an installation of the products, they should warranty the installation as well or declare in the terms that installation is not included. Some manufacturers offer some compensation for re-installation of their products at a pre-negotiated discounted rate if failure occurs. For large failures, say an entire commercial HVAC system, a negotiation with the manufacturer should be executed in order to not put a small business under financial duress.

Are customers ‘entitled’ to warranty freebies?

  • Customers returning products claiming failure, defective performance or damaged items are entitled to a replacement or repair per the warranty terms. If cash refunds are available, they should be spelled out in the terms. Many products are replacement or repair only.
  • Returns PolicyCustomer honesty is important. If the customer is lying about the performance of the product, they damaged the product themselves or misrepresented how they received the product, the conversations become ugly. Situations such as these need to be protected under the warranty terms and conditions.
  • Don’t offer cash back unless there is proof of purchase/receipt and the time elapsed is limited.  Most people don’t read warrantees until they need to use them, so make sure you’ve covered your company.
  • Do the math. What exactly is it costing to accept, say 8%, of sold products back? In your calculations, figure the labor, postage/trucking etc. as well. What handling will be needed afterwards to re-sell, re-condition, liquidate or dispose of the item? Whatever the average cost is, include it in the sale of the product after deducting the re-sale. If the cost is high, manage your warranty terms carefully.
  • In the case of service-only businesses, call-backs are costly. Sending a technician, installer, service person back to a customer has hidden costs. Not only is the employee time lost, the transportation costs (mileage, time), that tech’s billable time is lost, parts replacements and the lost confidence in your business’ ability to do the job right the first time is now questioned. Remember that customers talk and one bad experience gets shared many times over.

Returned sales cost small businesses thousands of dollars each year. If they aren’t accounted for ahead of time, they come off the bottom line. It is possible to protect yourself by planning ahead. Do the math and protect your profits.