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If you sell more than one type of product or service, prepare a separate sales forecast for each service or product group.

There are many sources of information to assist with your sales forecast.
Some key sources are: Competitors; Neighbouring Businesses; Trade suppliers; Downtown business associations
Trade associations; Trade publications; Trade directories;

Factors that can affect Sales can be divided into external and internal influences. Examples of these are:

External:
Seasons; Holidays; Special Events; Competition, direct or indirect Competition, External labour events; Productivity changes
Family formations; Births and deaths; Fashions or styles; Population changes; Consumer earnings; Political events
Weather

Internal:
Product changes, style, quality; Service changes, type, quality; Shortages, production capability; Promotional effort changes
Sales Motivation plans; Price changes; Shortages, inventory; Shortages/working capital; Distribution methods used
Credit policy changes; Labour Problems

Creating a sales forecast can be divided into four steps.

Step 1
Develop a customer profile and determine the trends in your industry.

Make some basic assumptions about the customers in your target market. Experienced business people will tell you that a good rule of thumb is that 20% of your customers account for 80% of your sales. If you can identify this 20% you can begin to develop a profile of your principal markets.

Sample customer profiles:
male, ages 20-34, professional, middle income, fitness conscious.

Young families, parents 25 to 39, middle income, home owners.

Small to medium sized magazine and book publishers with sales from $500,000 to $2,000,000

Determine trends by talking to trade suppliers about what is selling well and what is not. Check out recent copies of your industry's trade magazines. Search the Business Periodicals Index (found in larger libraries) for articles related to your type of business.

Question: What are five customer profiles for your business?

Question: What are some customer trends for your customers/clients?



Step 2
Look at the area where you will be trading

Establish the approximate size and location of your planned trading area.

Use available statistics to determine the general characteristics of this area.

Use local sources to determine unique characteristics about your trading area.

How far will your average customer travel to buy from your shop? Where do you intend to distribute or promote your product? This is your trading area.

Estimating the number of individuals or households can be done with little difficulty using national census data to be found at your library or town hall. Your local statistics office or chamber of commerce can identify what the average household spends on goods and services.

Neighbourhood business owners, the local Chamber of Commerce, the Government Agent and the community newspaper are some sources that can give you insight into unique characteristics of your area.

Question: What are the statistics on the people in your area?



Step 3
List and profile competitors selling in your trading area.

Refer back to the data you collected in your market research.

Get out on the street and study your competitors. Visit their stores or the locations where their product is offered. Analyse the location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product lines carried, promotional techniques, positioning, product catalogues and other handouts. If feasible, talk to customers and sales staff.


Step 4
Use your research to estimate your sales on a monthly basis for your first year.

The basis for your sales forecast could be the average monthly sales of a similar-sized competitor's operations that are operating in a similar market. It is recommended that you make adjustments for this year¹s predicted trend for the industry.

Be sure to reduce your figures by a start-up year factor of about 50% a month for the start-up months.

Consider how well your competition satisfies the needs of potential customers in your trading area. Determine how you fit in to this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, and better service?

Consider population and economic growth in your trading area.
Using your research, make an educated guess at your market share. If possible, express this as the number of customers you can hope to attract. You may want to keep it conservative and reduce your figure by approximately 15%.

Prepare sales estimates month by month. Be sure to assess how seasonal your business is and consider your start up months.


Further tips
Sales revenues from the same month in the previous year make a good base for predicting sales for that month in the succeeding year. For example, if the trend forecasters in the economy and the industry predict a general growth of 4% for the next year, it will be entirely acceptable for you to show each month¹s projected sales at 4% higher than your actual sales the previous year.

Credible forecasts can come from those who have the actual customer contact. Get the salespersons most closely associated with a particular product line, service, market or territory to give their best estimates. Experience has proven the grass roots forecasts can be surprisingly accurate. Sales Forecasting and the Business Plan

summarize the data after it has been reviewed and revised. The summary will form a part of your business plan. The sales forecast for the first year should be monthly, while the forecast for the next two years could be expressed as a quarterly figure. Get a second opinion. Have the forecast checked by someone else familiar with your line of business. Show them the factors you have considered and explain why you think the figures are realistic. Your skills at forecasting will improve with experience particularly if you treat it as a "live" forecast. Review your forecast monthly, insert your actual, and revise the forecast if you see any significant discrepancy that cannot be explained in terms of a one-time only situation. In this manner, your forecasting technique will rapidly improve and your forecast will become increasingly accurate.
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Ben Botes is an author, entrepreneur and expert speaker on new venture creation. He is also the founder of http://www.my1stbusiness.com a web portal for 1st time business owners and entrepreneurs. Visit my1stbusiness.com today for the most extensive range of small business resources, courses, articles and tools. Contact; ben.botes@my1stbusiness.com]]> Small Business Marketing http://www.my1stbusiness.com/weblog/index.php?itemid=18 Fri, 29 Jul 2005 17:09:06 -0500 http://www.my1stbusiness.com/weblog/index.php?itemid=18 http://feedproxy.google.com/~r/My1stbusiness/~3/2s_hs-VGyyY/index.php
By: Ben Botes, Copyright 2003 - 2004 www.My1stBusiness.com


We’ve seen hundreds of books on management and leadership fill the shelves at our local book store or business section of ‘what you should be reading’. But what does leadership mean to your business?

While your business benefits from being managed - kept orderly and productive - it will thrive from increased leadership. The essence of leadership is creating the change, including the change in your the culture, of your business, which is necessary to produce the results that will keep you ahead of the competition.

Leadership of this type is an emotional, not an intellectual, craft. It is an attitude, and the behaviours associated with that attitude, that results in participating in ways that inspire and motivate others to invest themselves in helping you create the results you want.

When people and companies get stuck, they usually focus on becoming more competent at doing what led them to being stuck in the first place. They work harder, try harder, add more resources, exercise more control, bear down. They produce more of the same or similar results and get more stuck.

Moving forward and making progress requires thinking about and doing things differently. It requires, in particular:
· Developing a different way of being intelligent. This includes developing more effective ways of thinking, working, communicating, honouring what you value, connecting with people, learning and dealing with the expectations and feelings that accompany change.
-
· Learning more about self. Understanding one's purpose and how it aligns with the corporate mission, how one derives meaning in his or her life and what drives that person. What people and businesses don't know about themselves controls them. The more they know, the more choices they have and the better choices they make.

Based on a study of hundreds of successful business owners and entrepreneurs, emotional competence was the crucial difference between mediocre leaders and stars. Almost 90 percent of the stars' leadership success was attributed to this difference.

The more responsibility you takes on in your business, the greater the increase in the importance of leadership of this type. Responsibility may come in the form of taking on a new employee or raising finance with the obligation to repay within a certain amount of time. Also, the more complex one's job, i.e., the greater the cognitive skill required, the greater the value added to your company by people with highly developed emotional competencies.

Nowhere can the importance of leadership, above and beyond technical sophistication, be better seen than in high-technology industries. The smarter people are, very often the less competent they are in handling people, themselves included. A 1994 follow-up of a study of 80 University of California at Berkeley Ph.D. scientists begun in the 1950s found emotional abilities four times more important to their success than IQ.
Truly effective leaders do not just attract followers. They also build other leaders. They model how to deal with change, how to motivate and inspire others, and how to create and bring into being a common vision.
We know that by strengthening the leadership skills of those who run your company, it will be stronger and more competitive. We also know that when the rank and file employees who serve you and your customers are led, rather than managed, they will experience greater satisfaction in their jobs and begin to emulate their leaders.

Most of us have worked for organisations where training decisions are based on the "spray and pray" theory - "If I send enough people to enough courses, something will stick somewhere, I hope."
Gone are the days of our parents where someone stayed with one organisation all their life. People will join your business because they are primarily looking for meaning in their work. The leaders which will best serve your mission will themselves experience such meaning and assist others in finding it. They know that it is not money that motivates people to be excellent. At the end of the day, people want to know that they have done something meaningful.


]]> Entrepreneurial Leadership http://www.my1stbusiness.com/weblog/index.php?itemid=5 Fri, 29 Jul 2005 16:11:00 -0500 http://www.my1stbusiness.com/weblog/index.php?itemid=5 http://feedproxy.google.com/~r/My1stbusiness/~3/UuRhbpn6HRk/index.php
One of the greatest benefits of projects in an organisational context is their ability and effectiveness in the achievement of goals. The success or failure of projects is largely related to the way that managers develop tactics or plans for the projects and how these plans can be effectively monitored and controlled through the various stages of the project lifecycle. It is a basic premise that the successful implementation of a project requires the development of a set of action plans together with subsequent tactics by the project manager. The planning stage of the project will define issues such as the project goal, targets and other milestones, as well as the establishment of a relationship with the clients or stakeholders of the project. The tactical aspects of the projects will include activities such as verifying the projects technical abilities, resources needed such as personnel and equipment and putting systems in place for the monitoring and control of the project. Although these planning and tactical activities are carried out through the duration of the project careful attention should also be given to the human issues and its influence on the project.

More and more organisations are using a project management approach for the effective execution of critical operations. Projects are often carried out in four phases, namely the defining, planning, executing and delivering of the project.

How do I get started on learning how to manage projects?
It is important to take part in the exercises that are given here. Many of us read trough modules like these as an overview without going through the practicality of it. Its all in the doing. Watching someone having a great experience on the television, or reading about it in a book is not the same as being there ourselves.

Although some project managers use a five step model for the managing of projects, our project model have four steps.

Step 1
Get clear about your project (conceptual planning phase)

The conceptual planning process aims to define the project as accurately as possible. The phase starts of by identifying the needs of those whom initiated the project, which are usually a client, management or stakeholders. This process determines not only the customer's criteria for acceptance of the final outcome, i.e., one of the project's success measures, but also identifies the starting point for the planning and performance of future activities. The company's main business objectives and strategies need to be identified and understood so that the project goals can be in line with them. Depending on the size of the business, the organisation may appoint a high-level executive who serves as a champion for the project. The project manager can use this person as a resource, coach, advocate, or sounding board during the project.

During this initial phase, the planning team, once appointed identifies risks associated with the whole project and how to respond to them. Conceptualising often involves an initial feasibility decision requiring management to answer questions such as, what is the problem, and what are the alternative solutions or projects? Selection techniques or decision-making procedures should ideally be put in place for the making of difficult decisions. Typical questions to be asked may include, what are the specific goals of the project? How do these goals match with the organisational mission? How do they meet the users' requirements? What is the general level of resource required? Are these resources available or must they be acquired? What are the technical requirements of the project? All these questions need to be addressed when evaluating and selecting a project’s undertakings. Milestones should be identified by which progress can be monitored. Informed estimates of time, cost and performance expectations can now be made. The project team will use these estimates to determine whether the project is, feasible and should continue, or impractical and be discontinued. The steps to be followed in the first phase could be as follows. It may vary from one project to another.

Convene a meeting with the author of the Request for Proposal or the customer who requested the project.

Gather additional information and identify proposed solutions.

Assign a project manager to assist in proposal development.

Identify potential team members required to support the proposed solution.

Convene a proposal review meeting with potential team members to identify: proposed creative approach; scope of work, potential number of effort days; resource requirements; technical requirements; and other issues to be addressed in the proposal.

Produce a work breakdown diagram, proposed budget and resource requirements list.

Produce a draft proposal that will be forwarded to the author of the Request for Proposal for review.

Convene a proposal review meeting to finalize or adjust the proposal.

This phase is extremely important. A good carpenter always measures twice and cut once. This step is about specifying what the measures will be.

Step 2
Project Organising

Ensuing the conceptual planning phase, the second stage aims to accomplish two main types of activities, those dealing with detail planning and those dealing with the project team. Some of the well-known planning functions of this phase are the construction of a network diagram, selection of project personnel, determining the availability of resources and selecting contractors if needed, making project location decisions, and determining budgets.

The decisions made in the first stage together with the work breakdown diagram, act as a guideline for this phase. A detailed activity plan or network diagram is the first to be compiled. Information is gathered from the work breakdown diagram and the graphic flow chart of the project plan. The network lays out the logical sequence of activities to be completed together with the start and finish times of each activity.
The following steps can be taken during this phase, although, once again they may vary depending on the project. Form the project team.

Create team member work plans.

Produce Statements of Work and sub-contracts for sub-contractors.

Produce a detailed project management plan which includes a detailed schedule, resource requirements, budget, quality assurance methods, communications, administrative procedures, reporting, project change process and other details needed to effectively initiate and manage the project in accordance with the approved proposal and contract.

Assess potential risks and produce risk management plan.

Procure required resources and personnel requirements.

Review draft project management plan with the project steak holders.

Conduct project kick-off meeting and sign-off the approved Project Management Plan.

Meet with the customer's subject-matter-experts, and other participants to gather all relevant data.

(As required) Train or provide detailed briefings to members of the project team and supporting customer personnel.

Finalize all contractor agreements with all sub-contractors.

Form and brief the project team about their work packages.

Step 3
Implementation and Control

The main activities of this stage include securing the necessary resources to perform the project work, executing the activities identified in the project planning, monitoring and reporting on project progress, and re-planing if needed. This phase will normally require the most time and effort. The project team will often acquire resources from outside the organisation to facilitate the timely completion of the project. Performance capabilities are continually tested to ensure that the project is carried out as intended. Management may be faced with important decisions such as equipment selection, project management software selection, choosing among various project compressing/crashing options if there is a need to finish earlier or overcome a delay related to for instance the installation of telephones. Alternative solutions to possible project problems or challenges also need to be in place.

Regular progress evaluations and reports are key to this phase. For this purpose, information and knowledge about the project progress were continuously circulated to the various project constituents. Accurate measures needed to be developed to track progress. Change control processes were to put in place to handle any requests for change. All requests for change might not be accepted and it is up to the project manager to make a decision taking resources and time constraints into consideration together with the overall impact on the success of the project. The steps to be followed in the first phase could be as follows. It may vary from one project to another.

The project team produces the products in accordance with the Project Management Plan and Quality Assurance Plan.

A process to track and report the completion of all scheduled tasks and the achievement of the planned milestones to the customer on a monthly basis is created.

Ensure the effective and timely use of all resources.

Control the expenditures of all budgeted funds.

Proactively measure the identified risks to the project and in conjunction with the project team and customer, produce plans to eliminate or reduce the identified risk.

Recommend to the customer and effectively execute all approved changes to the project objectives, plans, schedule, resources, and budgets.

Ensure products and services meet or exceed all quality standards as defined in step one.

This stage is concluded when the customer formally accepts the output from the project.

Step 4
Project Evaluating and System Improving

Last but not least, the final stage is a valuable yet underused project stage.

The project review should look at the processes used in the project, the outputs from the project, and the work performed by the team members and other individuals. Important decision analyses in this phase include project audits and evaluations, personnel appraisal, and feedback from stakeholders. Both the project management system and people involved can be improved by the lessons learned. Resources that were secured for the project are now released, and the project is transferred to its intended users. The final evaluation report is seen as the closure document for this phase sometimes be called the project history should completed as thoroughly as possible and kept for future reference and projects.

The Closing Phase normally takes a few days. During the Closing Phase the project manager will ensure the following tasks are completed:

Review the original contract and supporting documents to ensure all contract items and product specifications have been completed.

Deliver all final products to the customer.

Conduct a project close-out meeting with the customer, stakeholders and team members.

Update and close-off the final master project schedule.

Archive all project materials including deliverables, files, the Project Book, reference materials and other supporting documents.

Backup up and electronically archive all project electronic files.

Debrief all team members and contractors about their performance assessments.

Document the project team lessons learned.

Produce a final project report.

Celebrate the success of the project with team members.
]]> Entrepreneurial Leadership http://www.my1stbusiness.com/weblog/index.php?itemid=15 Fri, 10 Jun 2005 16:57:00 -0500 http://www.my1stbusiness.com/weblog/index.php?itemid=15 http://feedproxy.google.com/~r/My1stbusiness/~3/69TGp6NDL7I/index.php
The basic premises of designing an effective vision are as follows.
You must believe there is always a better way.
If you don't think there is a better way to run the business, then you don't need to create visions or strategies. If you do adopt this belief, it will keep you (and your client) aware that you need to monitor, review, and assess what you are doing, looking for what you could do better. The owner often feels that what they are achieving is good enough for now.

Otherwise they would have changed it before now. Most owners won't realize they even need to create a vision, so you will have to introduce them to this.
Work backwards.
Shift your mind set from incremental plodding forward, to having the owner see where they want to be 1, 2, or 3 years from now, and then work backwards.

People are ill-prepared for the future.
People do have ambitions to grow and thrive – and that's even more justification to create a vision. Just know that most people don't know how to prepare for the future, what skill sets are needed, etc. You will have to help them with this.

A real vision has to be based on real desires.
No matter how many mental pictures we form about the future, the vision will not be real to us unless it is based on our real desires.

As a business owner, vision means thinking for yourself and maintaining a clear image of your distant goals. In our work with entrepreneurs and the owners of small businesses, vision is that future they want to create, and in so doing, they unlock their potential, slot in their interest and generate excitement.

Vision is the underlying reason for why they do what they do in the first place.
It is very closely related to purpose and to mission.

Step 1
Surface and refine the owners personal vision

The first step is designed for the owner to self-reflect that the vision is based on their real desires.

Some questions to ask yourself/the owner at this point may be:
How do you want your story to go? Thirty years down the line?
What do you want your life to look like to others?
How do you want your life to feel on a day to day basis?
What do you want to say you truly know in your life and about your life?
How would I like to be with other people?
How do I want people to think about me? Turn these questions into a strategic objective What is the game you are playing? What are you values?
Income - How much money do I need to live the way I wish?
Am I in the business I want to be in?
Who is my ideal customer?
Note: Working on creating your vision and the vision of your business with a business Coach can seriously enhance the quality and effectiveness of the end result.

Step 2
Create a first draft

Build on the work accomplished in step one. The owner will have drawn from his or her personal experiences and values to create a set of ideas that both makes
sense and is personally exciting.


Step 3
Discuss the draft and ideas with the senior team The senior team discusses several process-type questions or thought starters to discover their viewpoints, the current reality of the business and where they think the future can be. This step is a structured but very open process.

Some questions that can be asked of the team or business are:
What is meaningful about your work?
What is meaningful about your contribution to the organization?
What contributions is your organization making to society?
What is your company especially good at?
How does your company stand apart?
What added value does your company’s customers receive?
Why are your company’s customers demanding its products and services?
What makes your company different from others in the industry?
How might your company’s learning assist other companies around the world in the same business? How might they become more successful based on your discoveries.



Step 4
Draft a second vision statement

Many new ideas will flow from the thought starter questions. Smaller groups and/or individual sessions with key managers may also be needed. It is from these sessions that the owner drafts a second vision statement. This second
statement is the topic of discussion with the senior staff over the next three to six months.

You may need several sessions (small bites) before progress is made. That's OK. Take as much time as you want. Both analytical thinking and a lot of dreaming big are required. The process should not reduce to analysis only, for it will lose its motivating possibilities.

Vision creation is always two steps forward and one backward. Do not expect a straight-line, linear process. It can be full of stops and starts, a bit confusing, and may ruffle some feathers (including the owner's)

Keep working with your team to get down to the core wants.

The owner must have laid a solid foundation for the creation of the vision statement by first having established a sense of urgency and the top team responsible to assist in creating the vision.

The process never works well without a minimum of effective teamwork.

The original ideas will be modified by eliminating one element, adding others and/or clarifying. The senior staff or even a larger group of people always modifies the first draft. Make sure that the owner is open to this process.

In the end, you want a statement that indicates a direction for the future that is desirable, feasible, focused, and flexible and is conveyable in five minutes or less.
]]> General http://www.my1stbusiness.com/weblog/index.php?itemid=12 Sun, 29 May 2005 16:55:00 -0500 http://www.my1stbusiness.com/weblog/index.php?itemid=12 http://feedproxy.google.com/~r/My1stbusiness/~3/VClvw436Dzw/index.php
By Ben Botes http://www.my1stbusiness.com

Whenever you communicate a message you are inevitably felling a story about your business. The media has an insatiable demand for stories; without them they would have very little to write about.

Public relations – can be a confusing term. But all businesses need and use PR, even if they don’t realise it. Businesses have to communicate with a wide audience of customers if they are to survive. It’s how well a company communicates that will determine its success levels.

The process of raising your business profile can be divided into four steps:

Step 1
Get clear on your marketing mix

You will often here someone on the website refer to the marketing mix. This refers to the five P's of marketing. Product, Place, Price, Promotion and People. Any business who combines the 5 P's effectively will be successful.

Who is Your Customer?
In order to tailor your marketing and advertising strategies to appeal to the tastes and interests of your market, you must first identify your customer. In order to do this, you it is necessary to conduct thorough research of the consumer marketplace. Keep in mind, the more information you have about your target market, the better able you will be to develop a successful marketing plan.

A market profile typically uses primary and secondary sources to answer key questions about a potential market. A profile is a picture or an outline. Information that makes up the social profiles of the people in your target market is called demographic information, and includes:
age, usually given in a range (20-35 years)
sex
marriage/partner status
location of household
family size and description
income, especially disposable income (money available to spend)
education level, usually to last level completed
occupation
interests, purchasing profile (what are consumers known to want?)
cultural, ethnic, racial background

A clothing manufacturer may consider a number of possible target markets--toddlers, athletes, grandparents (for grandchildren), teenagers, and tourists. A general profile of each of these possible markets will reveal which ones are more realistic, pose less risk, and which are more likely to show a profit. A test market survey of the most likely market groups, or those who buy for them, such as parents for babies and toddlers, can help you separate real target markets from unlikely possibilities. The Right Product
What are your customer's needs? What do they expect to get when they buy your product or use your service? The right product is the one that best fits their requirements.
People who eat in restaurants want more than a good meal. They might expect quick service, a reasonable price, a vegetarian menu, a children's menu, entertainment, a drive through window, or to be identified with a trendy crowd. It becomes a difficult and probably an unprofitable venture trying to satisfy everyone's needs.

If you have identified your customer and listed their expectations, you can design your product or service around their requirements.

The more you fulfil your customer's expectations, the better the quality of your product. Think of your product or service as more than just what the customers pays for. When you are planning your business consider how the whole transaction meets the customer's needs.

It is important to note that developing the product or service COMES AFTER you have identified the customer and their need. If you have an idea you think might be worth pursuing, develop the concept only when you have determined a genuine need and interest in the product.

Then let the market help you develop it and strengthen it. Most small businesses fail because the market was not enthusiastic about their idea and the entrepreneur was too vested to listen to the market early in the process. Positioning your Business
Positioning refers to the image customers have of your business. The goal is to create a business image that enables you to position your business in such a way that, in essence, it acts as a natural magnet for your intended customers. A number of factors that customers often look for include:
price (i.e. cheapest price, fair price, price for quality, etc.)
assortment
parking
service
sales personnel
quality
fashion
convenience
location
atmosphere

Your overall position should emphasize those areas that your customers value most, and those which make you different from your competition. Pricing Techniques
The importance of pricing can not be underestimated as incorrect pricing can often result in the failure of a business. New businesses often make the mistake of either charging too little or too much for their product or service. So to help you avoid making one of these mistakes, the following section will outline some of the guiding principles of price determination.
Price is a key part of marketing. Setting prices is called pricing.

Pricing to the Market
Compare prices with your competitors for similar products and services. Set the price range that customers will expect. You can use that market price range--what is acceptable to the market--as a guide to set your prices. Businesses or people to whom you sell may also price to the market by telling you what they will pay for your product or service. As you keep records of actual costs, the cost approach to pricing will help you make sure all your costs are covered, which may not be true in a market approach to pricing.

NOTE: Be careful about under pricing in order to compete or make sales. Use competitor's prices to establish the price range for similar products or services but don't under price; if your true costs are higher, your final prices will have to be higher.

Cost Approach to Pricing
Price must cover all costs of goods/services sold, including production costs of supplies, materials, fixed overhead, and time/labour, plus a profit. Costs should include costs of production, labour and non-labour, including overhead or fixed costs as well as supplies and materials.
Use this simple formula in setting a price (per unit):
Total Costs of Production Per Unit + Desired Dollar Profit Per Unit.

Businesses can set different profit rates, for example 15% profit on supplies and materials, 20% profit on labour/time, and 25% profit on overhead. These more complicated approaches to pricing usually emerge in response to the special needs of a particular business.

If your research reveals that similar products or services are available on the market at a cost much lower than what you could offer, you may have to either adjust your profit margin, the return you expect, or decide to provide enough specialized service or selection that the market will pay the extra. Alternatively, you may be forced to conclude that you cannot afford to make this item or provide this service and look for something else to do.

NOTE: Remember to cost materials at the level it costs to replace them - NOT at original prices; include salaries as a business expense; include interest in your business cost calculations -- interest that could have been accrued had the money used in the company been invested elsewhere (i.e. a bank); make allowances for future refunds, servicing, bad debts, amortization of capital costs of equipment or machinery.

"Rules of Thumb" in Setting Prices
Some types of businesses charge prices according to certain "rules of thumb": For example:
price is always twice labour plus materials, or twice materials plus
labour depending on which is higher; price is always materials and labour plus 20% for fixed costs, plus 25% for profits.

Calculating actual costs is the only proven way to make sure your prices cover your costs. Labour/time charges are to be covered partly in the costs of production and partly as a salary in the fixed/operating or overhead costs.

In summary, key points to consider in setting prices are:
marketing strategy and your immediate goals
competitors' prices, and the market
market demand for the product and consumer buying trends
need to cover costs and provide an adequate profit.

Step 2
Envision Success

Successful entrepreneurs develop 7-12 strategies to use side-by-side on a consistent basis. The key to successful marketing on a small budget is consistency over a long period of time. This means advance planning and a strong commitment to a realistic, sustainable plan.

Here are twelve guidelines to follow when putting your marketing program together.

Think in terms of a marketing campaign, not single pieces. Each step you take should be part of a total plan that is unified in style and message.

Aim your message directly at the people who can most benefit from your product or service, and who are in a position to buy. This is like aiming for the bull's-eye rather than just shooting in the direction of the target.

Put yourself in the position of the prospect. If you received the offer or message, how would you respond?

The goal is not to create a memorable marketing piece, but a piece to make your product or service memorable.

The amount of money spent on a piece has nothing to do with its success.

Sometimes simplicity is more effective that beautiful art and graphics. Avoid clutter. In fact, less is usually more.

Being clever, witty or funny just for the sake of it is a dangerous game and usually backfires. Use it sparingly.

Aim for an immediate impact. You only have a few seconds to get the prospects attention.

Limit each marketing piece to a single objective. If your goal is to get an appointment, stop there. Don't try to complete the whole sale.

Make your most important point stand out. Sameness makes everything run together, rendering it "invisible."

Always call for action. Tell them what you want them to do.

Before making any absolute claims, be sure you are aware of all the laws that might affect you.
It is true that almost everyone would love to have the world beat a path to their door. The truth is, most people don't even know (or care) that you have a door. To succeed in business

Step 3
Some Strategies to consider

Exhibiting at key trade shows where they'll get to meet prospects in person.
Speaking at industry events.
Pro-actively arranging personal meetings with major corporate prospects.
Promoting the business to previous clients and industry contacts.
Creating a follow up plan for all contacts.
Updating marketing material to address important client concerns (identified through in-house research), including the creation of fact sheets to help clients make the best decision for their circumstances.
Advertising in niche trade publications.
Look for media opportunities
Write often
Run mini-campaigns
Run special offers
Stress the exclusivity
Get involved in the community
Look for sponsorship opportunities

The majority of PR will have to be written, in one form or another – press releases, newsletters, brochures and adverts, case studies or articles. Different methods help businesses to get different messages across. But each one must be well written if it is to be effective. Some simple guidelines that will instantly improve your business writing are: Keep it simple: avoid using long or technical words. Be as brief as possible: don’t use three words where one will suffice. Grab the reader instantly: openings are all important. If you waffle on before putting your message across readers will switch off. Relate it to the readers’ needs: you know your product or service is the best, but readers need to be told how it will benefit them. Be creative: everybody is swamped with business literature and you need to find ways to set yours apart from your competitors. Focus on people: people are generally more interested in other people than they are in products.

Step 4
Review and Adjust

This may be one of the most important steps in the process. Many a budget has been spent without any returns. Ensure that you review your efforts daily and don't wait to long before adjusting your strategy.


]]> Small Business Marketing http://www.my1stbusiness.com/weblog/index.php?itemid=11 Fri, 29 Apr 2005 16:41:00 -0500 http://www.my1stbusiness.com/weblog/index.php?itemid=11 http://feedproxy.google.com/~r/My1stbusiness/~3/G0X70DxDHF8/index.php Small Business Outsourcing: An Introduction

Outsourcing is the delegation of a business process to an external service provider. The service provider will then be responsible for the day-to-day running and maintenance of the delegated process.

Before outsourcing an IT function, look at your firm's own goals and culture. Price might be a key consideration, but a valuable outsourcing firm is more a business partner than a service provider. Such a partner should lend a level of expertise to your small business that builds upon internal know-how. Only then can you rest assured that you have achieved an optimum blend of in-house and outsourced IT functions.

Step 1
Do you really need to outsource?

Before outsourcing an IT function, look at your firm's own goals and culture. What business objectives are you trying to accomplish by outsourcing this particular function? How will sending this function to an outside party impact the workflow within the company? Clear answers to these questions can help guide a business owner toward the most appropriate vendor.

Consider the advantages and disadvantages of outsourcing before you make your decision.

Advantages
Allows a business to focus on core activities
Streamlines a business' operations
Gives you access to professional capabilities
Shares the risk · Piece of mind that the process is in good hands (reliability)
Do not have to worry about continually introducing new technologies
Improves service quality
Frees up human resources
Frees up cash flow
Increases the control of your business
Makes the business more flexible to change (i.e. demand)

Disadvantages
The fear of the service provider ceasing to trade (bankruptcy, etc)
You may lose control of the process
Creates potential redundancies
Other companies may also be using the service provider. Therefore in some cases, the best interests of the service provider may be diluted with other users
You may lose focus of the customer and concentrate on the product (the outsourced process)
The loss of talent generated internally
Employees may react badly to outsourcing and consequently their quality of work may suffer.

Step 2
Buy the expertise:

A valuable outsource partner will do more than lighten the load. Such a partner will lend expertise to ensure an optimum blend of in-house and outsourced functions. In the case of network management, for instance, an outsourcer should "provide a small business with an operational, tactical and strategic view of their network environment,

This allows for quality recommendations to ensure network availability, reduction of total cost of ownership, optimization of network assets for meeting business needs, and support of future growth.

Step 3Know who you are outsourcing to.

The two most important factors in a successful outsourcing relationship are trust and security - without these the relationship is destined for failure. It is therefore important that you take the time and effort required to find the perfect partner.

Make sure your service provider is keeping current. "IT is very dynamic, so it can be difficult to intelligently know what's happening in IT," said Jeremy F. Shapiro, professor emeritus of operations research and management at MIT. The best vendors can provide not just services, but also "state-of-the-art knowledge about IT needs and developments."

Does this vendor value its employees? What is the average length of employment of the staff? A company that retains its employees must treat them well and value them.

Meet the team: Before signing anything, meet the people who will actually service your account. Good outsourcers will have a dedicated team servicing the customer, led by the controller who acts as the 'go to' person. Chain of command: Along these same lines, know who is talking to whom. The last thing that you can afford to have are layers of contacts, especially when time means money. Finding a provider or consultant that provides one point of contact and even better, one person, is any business' best bet. The language barrier: Finally, it's important to remember that even an outsourced IT function does not go away entirely. In most instances the small-business owner still will have to maintain some involvement. Look for an expert who can clearly explain answers in non-technical terms and can make tech-talk clear to even novice questioners.

Step 4
Know what you are buying

As you get closer to making a decision, it is important to agree upon a set of service level expectations or objectives," said Hoyer. "Measurement objectives can include streamlined operations, cost savings, and reporting with all activities pointing to an improved bottom line," he added. What matters most is to agree in advance on the service to be delivered and especially on the measures that will be used to determine satisfactory performance.

Many of the disadvantages of outsourcing can be avoided if you research the service provider and you do not regard outsourcing simply as a money saving scheme - this is not always the case. Consequently, you should be certain that you have a valid reason for outsourcing and that you intend to liaise regularly with the service provider to avoid loosing all control of the process.
----------------------------------------------------------------------------------------
About the author:
Learn more at http://www.my1stbusiness.com
Ben Botes MSc. MBA, is an Entrepreneur, Speaker, Writer, Coach and academic. He is the founder of My1stBusiness.com, a web portal dedicated to 1st time business leaders and entrepreneurs. He is also the Co-founder of South African Business Hubs, Business support Hubs and incubators for the new breed of South African Entrepreneurs. Visit the sites for contacts, networking, a MarketPlace, hundreds of free Micro Modules, Tele-classes, Resources and Coaching designed for you to succeed with your business.
Join the My1stbusiness.com Reseller Program and earn 40% referral commission http://www.my1stbusiness.com/affiliate

Read Ben's Blog at http://www.my1stbusiness.com/weblog

]]> General http://www.my1stbusiness.com/weblog/index.php?itemid=10 Tue, 29 Mar 2005 16:38:00 -0600 http://www.my1stbusiness.com/weblog/index.php?itemid=10 http://feedproxy.google.com/~r/My1stbusiness/~3/Cv1EHJUuzLc/index.php Small Business Pricing: Setting A Price For Your Product / Service

The importance of pricing can not be underestimated as incorrect pricing can often result in the failure of a business. New businesses often make the mistake of either charging too little or too much for their product or service. So to help you avoid making one of these mistakes, the following section will outline some of the guiding principles of price determination. Price is a key part of marketing. Setting prices is called pricing.

Pricing means more than how much you charge. Smart customers look beyond pricing when considering a purchase. Price is important but so are delivery times, guarantees, customer support and quality to name a few.

Small and home based businesses can - in many cases - do a better job than "big businesses" in some of these areas. You should evaluate your pricing based on this fact. You're small and don't have the inertia or paperwork logjams of a bigger business. You're quick on your feet and can change direction easily and quickly.
How do I get started on pricing a product/service? There are 4 steps here suggested by us. This module may not serve all types of businesses so if you are not sure consult as many sources as possible

Step 1
Do your homework

You cannot determine prices based only on costs and desired profit margins. First step is to do a little research to get some "real world" pricing guidelines. You don't need a high priced marketing firm to help. Remember, you know your business better than any consultant. Refer to the micro module on Market Research or follow the following pointers on finding out what your competitors and other businesses are doing regarding price. Once again there is no substitute for getting out into the field and doing the research yourself.

Locate a trade association, organization or networking group whose specialty is your service. If none exists, find an association with a similar product. In general, associations can tell you the high-low and average prices charged by members. You can find some organizations listed at our Free for al links or at any local business advice center.

Trade/Business Journals and newspapers contain articles that may include prices. At least once a year, I see an article about my industry online or in a periodical that contains industry fees.

Ask your accountant or Coach for some ideas; after all, they deal with business owners all the time.

There are many career and employee guides that provide industry or job related prices. Consult any industry specific control or accreditation body.

Obtain the cost of raw materials and supplies necessary for your product. Surely you want to charge more than it's costing you for the items!

Many business owners place a pricing structure on their websites. Using the industry name, plus the word "rate" or "fees", you can find those sites on the Internet.

Determine your hourly rate. What is your time worth?

Call similar businesses, outside your local area, for their prices. If you're not their competition, you have a better chance to be told the score.

Visit stores that sell the product you're interested in selling to determine their pricing system.

Ask everyone you know "if" and "what" they will pay for "x". Ask prospective clients what they would pay for your product or service.

Step 2
Determine Your Pricing Objective - What do you hope to achieve?

There are 3 ways to find the appropriate level for you and your product.

Base Price -- The lowest price or rate you must charge to cover your cost including, cost of living and keeping your knowledge and skills up to date.

Base Price is one of your pricing objectives. It's a very important one. This is the one figure you need know so you can keep your doors open. This is your break even point. The absolute minimum needed.
Chargeable Time is the maximum number of working days/hours in a given year. This is the one figure most business owners never consider. It is the number one reason why you end up working long hours and long weeks for your business.
Now divide your cost or Base Price by the number of days from your chargeable time figure. This gives you your daily income benchmark. The amount you need to be making per day from your products or service rates.

Be careful about lowering prices just to meet or beat the competition. There are, however, some good reasons to lower prices:
A strategy to increase market share.
Promote a new product or service.
Attract attention to a over stocked product.
Encourage high volume purchases.
Increase seasonal business (Christmas sale, etc)


Realistic Price -- Substantially higher than Base Price. Top of the quality range in your field but still competitive while offering good value and service to your customers.

Sometimes you have to increase prices in order to cover, for example, increased cost of materials, labor, etc. When an increase is necessary ease the pain for your customers by considering the following:
Notify your existing customers of the increase and, if possible, give them an opportunity to purchase at the existing prices.
Try and advertise the increase along with "new and improved" products or services.
Give the customer something in return for the increased costs. For example, free shipping with orders above a certain value.
If possible, delay the increase for existing customers.


Premium Price -- You position your product for the "elite group" and go after the client who wants and can afford the best.
Daily Income Benchmark -- How Much Per Day You Need To Make.
How do you determine daily amount? You need two figures... Base Price and Chargeable Time.

Step 3
Consider some key pricing strategies

Pricing to the Market
Compare prices with your competitors for similar products and services. Set the price range that customers will expect. You can use that market price range--what is acceptable to the market--as a guide to set your prices. Businesses or people to whom you sell may also price to the market by telling you what they will pay for your product or service. As you keep records of actual costs, the cost approach to pricing will help you make sure all your costs are covered, which may not be true in a market approach to pricing.

NOTE: Be careful about underpricing in order to compete or make sales. Use competitor's prices to establish the price range for similar products or services but don't underprice; if your true costs are higher, your final prices will have to be higher.

Cost Approach to Pricing
Price must cover all costs of goods/services sold, including production costs of supplies, materials, fixed overhead, and time/labour, plus a profit. Costs should include costs of production, labour and non-labour, including overhead or fixed costs as well as supplies and materials.
Use this simple formula in setting a price (per unit):

Total Costs of Production Per Unit + Desired Dollar Profit Per Unit
Businesses can set different profit rates, for example 15% profit on supplies and materials, 20% profit on labour/time, and 25% profit on overhead. These more complicated approaches to pricing usually emerge in response to the special needs of a particular business.

If your research reveals that similar products or services are available on the market at a cost much lower than what you could offer, you may have to either adjust your profit margin, the return you expect, or decide to provide enough specialized service or selection that the market will pay the extra. Alternatively, you may be forced to conclude that you cannot afford to make this item or provide this service and look for something else to do.

NOTE: Remember to cost materials at the level it costs to replace them - NOT at original prices; include salaries as a business expense; include interest in your business cost calculations -- interest that could have been accrued had the money used in the company been invested elsewhere (i.e. a bank); make allowances for future refunds, servicing, bad debts, amortization of capital costs of equipment or machinery.

Calculating actual costs is the only proven way to make sure your prices cover your costs. Labour/time charges are to be covered partly in the costs of production and partly as a salary in the fixed/operating or overhead costs. In summary, key points to consider in setting prices are:
marketing strategy and your immediate goals
competitors' prices, and the market
market demand for the product and consumer buying trends need to cover costs and provide an adequate profit.

Step 4
Price your product and review regularly

Don't guess or do your pricing on a whim. Take time and go through the process and you'll be on the right track to a more successful and profitable business.

The biggest mistake small businesses make concerning pricing is not reassessing pricing on a regular basis. The marketplace is constantly changing making it mandatory you keep a close watch on your pricing. Raise or lower prices as necessary keeping the above suggestions in mind.

Whatever route you choose, even a small increase in price can have a big positive effect on the bottom line–especially if you’re a high volume producer, notes co-authors Dolan and Simon. If Coca-Cola raised its prices 1% across the board, the company’s bottom line would rise by 6.4%, they write.

Remember that you can always increase your price.

About the author:
Learn more at http://www.sabusinesshub.co.za
Ben Botes MSc. MBA, is an Entrepreneur, Speaker, Writer, Coach and academic. He is the founder of My1stBusiness.com, a web portal dedicated to 1st time business leaders and entrepreneurs. He is also the Co-founder of South African Business Hubs, Business support Hubs and incubators for the new breed of South African Entrepreneurs. Visit the sites for contacts, networking, a MarketPlace, hundreds of free Micro Modules, Tele-classes, Resources and Coaching designed for you to succeed with your business.
Read Ben's Blog at http://www.my1stbusiness.com/weblog


]]> Small Business Marketing http://www.my1stbusiness.com/weblog/index.php?itemid=9 Tue, 01 Mar 2005 16:37:00 -0600 http://www.my1stbusiness.com/weblog/index.php?itemid=9 http://feedproxy.google.com/~r/My1stbusiness/~3/JZIJEXSjErA/index.php
You don’t have to be a born salesman to get orders. You don’t even have to enjoy selling. You just have to be clear about what you want and what you have to offer.

Remember that effective selling is essential to the success of your business. So whether you will be making the sales or have a team to do that, you should do everything you can to ensure that your sales are done in the best way possible.

Selling is one of the most important aspects of any business.

I suggest that if you at this point have not yet worked through the Micro Module on Finding Clients and Knowing Your Clients, that you do that now.

As you go through the following nine skills, think of the practical issues of your specific service, how can you implement these steps, what else could you do? In order for this module to be effective you have to work through it and not just read it. Use this as your opportunity to become a great presenter.

Step 1
Know your product, its benefit and competitive advantage

Your product may seems to be a haircut, but it's probably admiration. It looks like a motorcar, but it's probably status. It might be called a bungee jump, but it's probably excitement. If you're selling to other companies, the benefit is probably increased sales, lower costs or higher profits.

Why does your customer buy the product or service?
What benefit do you sell?
In which way is your product different from the competition?
Do you have a unique selling proposition? What is it?
What is your competitive advantage?
Why should anybody buy the product or service from you?
Is your product perceived by the customer as being better in some way?
Is it cheaper/faster?
Does the customer buy because you are an extremely pleasant person?
Who is your competition?
Why do some customers buy from the competition?
What is the competitive advantage of your competitor?
In which areas are your competitors superior?
In which ways are they inferior?
How can you creatively imitate your competitor?
What is "unique" about the product?
Does it provide better durability, not like another in nature, quality or form?
Is it unique by its appearance and/or design? Does its appearance convey desirable qualities?
How does the product compare with the competition?
Can the product be recognizable and prove useful and be price competitive?
Service - will it require less servicing or less costly servicing than existing products?

Step 2
Identify your customers It is only logical that in order to find your clients, you need to know who they are.

Who or what do you plan to sell your product to?
How do customers perceive themselves?
How do you plan to acquire customers?
What distribution methods will you need?
What features do your customers want?
What are they prepared to pay?
What form of advertising and promotion will be effective to produce sales and sell the product?
What will promotion and advertising cost?
Where is your target customer most likely to buy your product?
How important is price to a customer?
How important are product or service quality and convenience to your customer?

Focus on customers' needs. Listen to your customer.

Why should anybody buy your product or service?
What is the benefit or improvement in their condition?
Whose life will be enriched?
Who will get the greatest improvement from your product or service?
With which customers does your competitive advantage make a difference?
With which customers does your competitive advantage make the biggest difference?

Customers want to be more, have more, do more. People buy for ego needs, status needs, self-actualization needs, etc. People buy for safety, security, admiration, social status, recognition, prestige, respect, to increase sales, lower costs, increase profits, self-improvement, excitement, popularity, greater health, self-expression, influence, power, financial success, more knowledge, greater skills, companionship, self-esteem, fear of loss, desire for gain.

Step 3
Consider our tips

Get past the receptionist and on to the decision-maker.
Be cheerful and polite, have – and show – a good knowledge of the target company.
Explain that what you offer will need to be assessed by an appropriate manager. Where possible make appointments. Different businesses will have different ‘best times’ to see them. You’ll struggle to catch a builder or farmer when the weather is good and remember that most people still adopt the traditional lunchtime.
When arranging appointments always offer a choice. Asking ‘Which is better for you?’ makes them choose, and is better than an open-ended ‘When would be good for you?’ which can elicit a negative response. I
f you’re selling a product that needs demonstrating, make absolutely certain that it’s working perfectly before you leave for the appointment.
Know exactly what you want, but try to think, talk and respond form the buyer’s point of view.
Sell the benefits and not the features of your products or service. Remember that the likes of Kodak don’t sell films, they sell memories. Try to ask, early on in the conversation, questions which cannot be answered with simple ‘yes’ or ‘no’ responses.
Open questions lead to improved discussions, and if you’re listening closely to the answers you should be able to work out any problems the buyer may have.
You need to know these if you are going to sell solutions.
Take objections seriously, but try to turn them to your advantage.
Think creatively about how you can offer to overcome objections and make sure you fully understand each objection before addressing it.
Recognize buying signals – questions like ‘Will it take unleaded?’ and ‘What guarantees do you give?’ W
hen you begin to hear these close the sale quickly.
Never forget to go for the close and don’t be embarrassed about asking for the order – that is what you’re there for, after all.


Step 4
Follow up

The sale is just the beginning. Following up the deal will strengthen the relationship with your new customer, and could provide opportunities for additional sales. And finally don’t forget that continually evaluating your sales process is vital if you’re hoping to refine and improve it – few things are ever perfect.
]]> Small Business Marketing http://www.my1stbusiness.com/weblog/index.php?itemid=8 Sat, 29 Jan 2005 16:34:00 -0600 http://www.my1stbusiness.com/weblog/index.php?itemid=8 http://feedproxy.google.com/~r/My1stbusiness/~3/8QddDTWUGfE/index.php
In 1968, George Land gave 1,600 5-year-olds a creativity test used by NASA to select innovative engineers and scientists. He then re-tested the same children at ages 10 and 15. The test results were staggering! 98% at age 5 registered genius level creativity, 30% at 10 year and 12% at 15 years of age. The same test given to 280,000 adults placed their genius level creativity at only 2%! In his book 'Breakpoint and Beyond', co-authored by Beth Jarman, Land concluded that non-creative behaviour is learned".

Innovation originates from the French word "innovacyon" meaning "renewal" or "new way of doing things.”

Most of us would love to be more innovative, but are either to busy with ‘important life stuff’ or simply just don’t know where to start.

Unfortunately, innovation, unlike audits or reengineering, is not given to formulas. It is given to people -- restless, inspired, fascinated individuals with an almost cellular need for change. And while it can be supported by systems, it can never be reduced to systems. "Innovation," as Tom Peters so aptly put it, "is a messy business."

To become more innovative, forget about slick formulas and the excuses why you can’t be and bring your awareness to what is happening inside you. Because that's where it starts. What language are you using to describe your innovative ability? What does that internal critic have to say? Perhaps you are reminding yourself that if something were really such a good idea then some else would already have thought of it.

The answer is that we are all innovative and creative, albeit in our own way. It is the degree to which we allow and trust our creativity to come to life that distinguishes us from others.

So ... if you are one of the self-chosen few willing to stop blaming your organisation and start taking personal responsibility for innovating, take a look at the following innovative qualities, and ask yourself, ‘starting today, how can I be more…….?’ Or ‘What will happen at work/in my life if I…..?

Challenges status quo -- dissatisfied with current reality, questions authority and routine and confronts assumptions.

Curious -- actively explores the environment, investigates new possibilities, and honours the sense of awe and wonder.

Self-motivated -- responds to deep inner needs, proactively initiates new projects, intrinsically rewarded for efforts.

Visionary -- highly imaginative, maintains a future orientation, thinks in mental pictures.

Entertains the fantastic -- conjures outrageous scenarios, sees possibilities within the seemingly impossible, honours dreams and daydreams.

Takes risks -- goes beyond the comfort zone, experimental and non- conform- ing, courageously willing to "fail."

Peripatetic -- changes work environments as needed; wanders, walks or travels to inspire fresh thinking; given to movement and interaction.

Playful/humorous -- appreciates incongruities and surprise, able to appear foolish and child-like, laughs easily and often.

Self-accepting -- withholds compulsive criticism of their own ideas, understands "perfection is the enemy of the good," unattached to "looking good" in the eyes of others.

Flexible/adaptive -- open to serendipity and change, able to adjust "game plan" as needed, entertains multiple ideas and solutions.

Makes new connections -- sees relationships between seemingly disconnected elements, synthesises odd combinations, distils unusual ideas down to their underlying principles.

Reflective -- incubates on problems and challenges; seeks out states of immersion; ponders, muses and contemplates.

Recognises (and re-cognises) patterns -- perceptive and discriminating, notices organising principles and trends, sees (and challenges) the "Big Picture."

Tolerates ambiguity -- comfortable with chaos, able to entertain paradox, doesn't settle for the first "right idea."

Committed to learning -- continually seeks knowledge, synthesises new input quickly, balances information gathering and action.

Balances intuition and analysis -- alternates between divergent and convergent thinking; entertains hunches before analysing them; trusts their gut, uses their head.

Situationally collaborative -- balances rugged individualism with political savvy, open to coaching and support, rallies organisational support as needed.

Formally articulate -- communicates ideas effectively, translates abstract concepts into meaningful language, creates prototypes with ease.

Resilient -- bounces back from disappointment, learns quickly from feedback, willing to "try, try again."

Persevering -- hardworking and persistent, champions new ideas with tenacity, committed to follow-through and bottom-line results.

You simply have to choose to be more Innovative.

Ben Botes MBA, MSc ben.botes@my1stbusiness.com

Ben Coaches business leaders and entrepreneurs.
]]> Innovation http://www.my1stbusiness.com/weblog/index.php?itemid=7 Wed, 29 Dec 2004 16:28:00 -0600 http://www.my1stbusiness.com/weblog/index.php?itemid=7 http://feedproxy.google.com/~r/My1stbusiness/~3/0ILzqucoKac/index.php
The importance of innovation has been described in a multitude of ways in recent years: Innovation has displaced quality as the standard for differentiation. Innovation is the only sustainable competitive advantage. Innovation is a necessity for continued existence. No matter how it is portrayed, innovation is understood by today’s vast business audience to be vital to any organisation's success.

Innovation has always been a primary challenge of leadership. Today we live in an era of such rapid change and evolution that leaders must work constantly to develop the capacity for continuous change and frequent adaptation, while ensuring that identity and values remain constant. They must recognise people's innate capacity to adapt and create -- to innovate.

In my own work I am constantly and happily surprised by how impossible it is to extinguish the human spirit. People who had been given up for dead in their organisations, once conditions change and they feel welcomed back in, find new energy and become great innovators

The human capacity to invent and create is universal. Ours is a living world of continuous creation and infinite variation. Scientists keep discovering more species; there may be more than 50 million of them on earth, each the embodiment of an innovation that worked. Yet when we look at our own species, we frequently say we're "resistant to change."

Many people are of course resistant to change due to the perceived fear and the many uncertainties that change might hold. How can this be overcome, or perhaps we should consider, how we have coped and thrived with change for so long?

We know that the only path to creating more innovative workplaces and communities is to depend on one another. We cannot cope, much less create, in this increasingly fast and turbulent world without each other. If we try to do it alone, we will fail.
There is no substitute for human creativity, human caring, human will. We can be incredibly resourceful, imaginative, and open-hearted. We can do the impossible, learn and change quickly, and extend instant compassion to those who are suffering. And we use these creative and compassionate behaviours frequently. If you look at your daily life, how often do you figure out an answer to a problem, or find a slightly better way of doing something, or extend yourself to someone in need? Very few people go through their days as robots, doing only repetitive tasks, never noticing that anybody else is nearby. Take a moment to look around at your colleagues and neighbours, and you'll see the same behaviours -- people trying to be useful, trying to make some small contribution, trying to help someone else.

We have forgotten what we're capable of, and we let our worst natures rise to the surface. We got into this sorry state partly because, for too long, we've been treating people as machines. We've forced people into tiny boxes called roles and job descriptions. We've told people what to do and how they should behave. We've told them they weren't creative, couldn't contribute, and couldn’t think.

After so many years of being bossed around, of working within confining roles, of unending reorganisation, reengineering, downsizing, mergers, and power plays, most people are exhausted, cynical, and focused only on self-protection. Who wouldn't be? But it's important to remember that we created these negative and demoralised people. We created them by discounting and denying our best human capacities.

But people are still willing to come back; they still want to work side by side with us to find solutions, develop innovations, and make a difference in the world. We just need to invite them back. We do this by using simple processes that bring us together to talk to one another, listen to one another's stories, reflect together on what we're learning as we do our work. We do this by developing relationships of trust where we do what we say, where we speak truthfully, where we refuse to act from petty self-interest. Many courageous companies, leaders, and facilitators have already developed these processes and relationships. Many pioneers have created processes and organisations that depend on human capacity and know how to evoke our very best.

In my experience, people everywhere want to work together, because daily they are overwhelmed by problems that they can't solve alone. People want to help. People want to contribute. Everyone wants to feel creative and hopeful again.

As leaders, as neighbours, as colleagues, it is time to turn to one another, to engage in the intentional search for human goodness. In our meetings and deliberations, we can reach out and invite in those we have excluded. We can recognise that no one person or leader has the answer, that we need everybody's creativity to find our way through this strange New World. We can act from the certainty that most people want to care about others, and invite them to step forward with their compassion. We can realise that "You can't hate someone whose story you know."
We are our only hope for creating a future worth working for. We can't go it alone, we can't get there without each other, and we can't create it without relying anew on our fundamental and precious human goodness.
Ben Botes MBA, MSc. ben.botes@my1stbusiness.com
Ben Coaches leaders and entrepreneurs
]]> Innovation http://www.my1stbusiness.com/weblog/index.php?itemid=6 Mon, 29 Nov 2004 16:26:00 -0600 http://www.my1stbusiness.com/weblog/index.php?itemid=6