Posted by: on November 13
With just about every business now under pressure to lower prices, it is more important than ever for business owners to know their real costs. What are the daily forecasts for your customers and what will you need to satisfy each order? By developing a system of receiving forecasts and then applying needed labor and materials, you will determine your exact costs each day.
To get started, you should ascertain your next-day activity from your customers. Then determine the number of man-hours required for the next day to meet client demand. In allocating labor, you should have just enough employees to get the job done for each customer without overtime. Add the daily cost of materials needed to complete the work.
At the end of each day, look at the number of tasks actually accomplished and compare it to the actual labor employed. If you see discrepancies in productivity, you can adjust as needed.
This daily forecast will give you a more concrete and accurate picture of your business. It will help you identify ways to save money, boost productivity, improve operations, and ultimately compete more effectively.
Chris Carey
President
Chris Carey Advisors
New York
Posted by: on November 12
In today’s tough economy, every dollar counts. Yet do you know how your business is really performing? How your company might compare to the norms for your industry?
Many entrepreneurs tend to operate by instinct, with no measurements in place. Establishing productivity standards, with performance metrics by product group and by customer, is a first step to track actual performance. To get started, you should evaluate every client account and define the minimal number of distinct tasks it takes to service the business. The key to being effective is not to get caught in creating too many tasks. Even with highly complex operations, the task count should be as small as possible.
Through observation and logs, you can determine over a two-week period the actual time and labor it takes to complete the total tasks. Your current average productivity measurements could be represented as units per man-hour.
The key is to keep it simple. But the creation of performance metrics will help establish predictability and give you better control. You’ll have a way to gauge how well your business is doing today and how you can improve it for the future.
Chris Carey
President
Chris Carey Advisors
New York
Posted by: on November 11
Does your small business still use a suggestion box for employee feedback? If so, it’s time to upgrade to a better system.
Your business needs to continually progress and that will come through finding new profit-producing and cost-saving initiatives. A great way to develop these is to harvest ideas from your employees. Unfortunately, your employees are not likely to give good profit-producing and cost-saving ideas if they’re contributing ideas in an anonymous box and aren’t benefiting from, or getting credit for, their suggestions. Instead, encourage your employees to find profit-producing opportunities and then go online and submit the proposal to their supervisor electronically. This will provide a time-stamped document showing who was the first to come up with that great idea. Of course, providing some sort of incentive or reward is always certain to get the gears turning and producing quality ideas.
Obviously not all ideas are good ones. The most frequent complaint by upper management regarding employee profit suggestions is that few are very feasible in terms of net financial benefit.
Therefore it will be important to encourage your employees to look at the feasibility of their profit proposal to make sure it will have a reasonably short pay-back time—and an adequate return on investment.
Larry Myler
CEO
More or Less
Salt Lake City
Posted by: on November 10
Small business owners have always had to focus on streamlining and improving efficiencies in order to stay competitive and remain afloat—but what about creating solid competitive advantages by improving the customer experience?
Small business owners strive to provide a customer experience that differentiates them from their competition, but they often feel that they can’t compete on all levels against large national or regional merchants. Loyalty solutions can help level this playing field and are easily attainable for small businesses.
Loyalty solutions can track customer information, including how much is being spent and when customers are spending. Targeted marketing efforts that cater to the exact interests of customers will undoubtedly improve their experiences, increase marketing efficiencies, and ultimately cut costs for the small business owner. In today’s current economic environment, loyalty solutions become a wise investment and marketing tactic for small business owners and should not be viewed as an additional expense.
Here are suggestions on how to enhance loyalty programs through various strategies and real life applications for small businesses:
1. Real-time rewards, offers, and messaging. Reward loyal customers with instant discounts at the point of sale. Consumers have identified receiving a discount at the point of sale as their most preferred retail reward, according to a study by First Data.
2. Customer relationship management tool. Track the spending behavior of your customers to ensure you always have what they need when they need it. Understanding when your customers are buying and how much they’re spending will move items off the shelf and create better loyalty.
3. Targeted offers and rewards. Offer a wide range of promotions with the right mix. If the current program is a punch card, add discounts to items for card holders on particular days or create "double punch" days on slower business days.
4. Effective customized communication. Communicate with customers via relevant messages, using the communication vehicles they want. For instance, if customers provide their birthday, invite them to celebrate with a special discount on that day. Other vehicles include e-mail coupons, point-of-sale discounts, and mobile-phone messaging.
5. Customer-facing Web site. Provide an additional way to communicate with customers by creating a reward program site filled with special coupons, frequency discounts, and more. Only customers who sign up online can receive these exclusive offers.
Stuart Kiefer
Division manager for Loyalty Solutions
First Data
Atlanta
Posted by: on November 09
In the technology business, we often forget that to most people, we speak a foreign language. The first time I met my former boss, Web.com CEO Jeff Stibel, he asked me: "What do you think the restaurant owners in the food court would say if we asked them what hosting meant?" His point wasn’t to confuse me, but to remind me that tech-speak isn’t a native tongue for the general population. In that spirit, I believe it is important to clearly define jargon for my clients, or anyone seeking counsel on technology deployments. For small businesses looking into cloud computing, even the basics can be misleading.
Cloud computing at its root is a service that provides solutions through the Internet. The "cloud" provides services that vary in capability from basic e-mail service to enterprise software applications such as customer relationship management (CRM). The primary objective of cloud computing is to provide companies and consumers with a powerful platform to build and host applications that allow them the ability to scale on demand. For example, most cable providers offer programming "on-demand," which allows consumers to watch movies and TV shows with a click of the remote. It is this principal that is applied to cloud computing; technology services can be available at the click of a button.
Due to the cloud and its recent explosion onto the marketplace, a small business can now use the same software and services that major corporations do today, without having its own IT staff or datacenter. Companies such as Microsoft are offering powerful applications, including Exchange, SharePoint, Live Meeting, CRM, and several other services on-demand, for a fraction of what it would cost to run internally. They are not alone in this race to empower small business owners, who are cost- and time-sensitive. Knowledge of technology is no longer needed in order to leverage its power and benefits.
Imagine what it would be like without any servers in your office and an IT staff that focused on growing your business instead of keeping the lights on. With the cloud, the black box of technology—and all its benefits and cost savings—is now open for mainstream use.
Jordan Fladell
Solutions director
Slalom Consulting
Atlanta
