Archive for the ‘consulting’ Tag

10 questions small businesses need to answer

As a consultant, I have walked into many small companies on that first day and wondered what the next few weeks would be like. Every company is different and just about every job has had a different set of requirements and objectives. But, when I push aside the differences, I see some common threads. When it comes to small businesses, especially the 25 people or less kind, I have found that we have to sometimes get back to basics in order to move forward.
So, I thought I would share the top 10 things that I would ask any small business to think about and answer.

1. What do you make/do? OK, no snickering out there – this is serious stuff. It is often very hard for small companies to specifically define and clearly state what they do/sell. You should be able to clearly define your products and/or services in a couple of sentences.
2. Who are your competitors? This is not just a list of all the companies who sell the same thing(s) you sell. It is a list of the companies who sell their similar product to the people that you think would buy your product. There is a difference and it’s important to understand it. For instance, if you sell handmade soaps, your competitors are not Proctor and Gamble, Dove, Irish Spring, etc. Your competitors are more likely to be other handmade soaps, boutique soaps, specialty companies selling organic soaps and so on. Figure out who exactly is selling in your target market – which leads me to #3…
3. Who is your customer? Who are you trying to sell to? Who wants or needs your product? Where are they and what are they like? There are not too many small businesses out there who target an entire population – so figure this out. Once you do, it makes it a lot easier to find potential customers – at least you know what they might look like!
4. Why should anyone buy from you? What is your value proposition? You cannot convince someone to buy from you if you cannot define what value you can provide. What is better about you than the other guy? What needs do your customers have that will be addressed with your product? Are you faster, cheaper, nicer, bigger??? Ok – these are a whole bunch of questions – but I’m counting them as one!
5. Do you have the right people working for you? Small businesses can’t afford to have a bunch of ‘C’ players. You need to have the right people, because when there are just a few of you doing everything, you need to trust that things are being done right. Don’t tolerate incompetence – you can’t afford it.
6. Have you communicated with your employees? I always thought that big companies would be bad at the whole communication thing and that small companies would be great at it. Well, based on my experience, small companies do a terrible job at communicating to employees. I’m not sure why, and I’m sure it is not always the case, but it is common. The lack of more formal systems being in place for employee training, not having big department meetings and the fact that communications are generally informal, are all contributing factors. So, make an extra effort to talk to your staff. People need information in order to connect and they need to understand what is happening with the business.
7. How are you funding your growth? Do you know where your next round is going to come from? Can you/should you borrow? Cash is king and you need to know where the money is and what your cash flow looks like. (yes, for some businesses, this should be question #1)
8. How will you market/sell your products? What is your marketing strategy? Besides your web site, what are you doing to sell? Where are you selling? So many options here – you need a plan. Once you have a plan, you need to measure results and adjust as required. Don’t get stagnant here – it’s vital to re-visit your plan and try new things. Stick to the core message and branding though, otherwise you keep starting over instead of enhancing.
9. What price can you/should you charge for your product? Product Management 101 – the art of pricing. Pricing, for many businesses, is not an exact science. No one wants to leave money on the table, yet if we come out too high, business can be lost quickly. Do your homework on this one. Search competitive products, talk to people in the business, look at your costs and put a stake in the ground. Then, listen to your customers and sales people. Adjust accordingly, but don’t always jump when someone says they need a better price. We all say that. Know your market and your value.
10. How can I be better? This is the question that needs to be asked regularly. Never sit back and think everything is great. Things can always be improved and the market will change over time. Never be satisfied with the status quo. Never.
What would you add to this list?


Choosing a Consultant/Contractor

As a long-time Consultant/Contractor, I have had the opportunity to see the pros and cons for companies, when considering contracted help. Whether you call us Consultants, Contractors, Freelancers, . . . we are generally temporary, short-term help brought into a company to address, or help to address, a specific need. I have met many consultants over the years and I have to admit, I have mixed emotions about many of them. There are some people out there who are very talented – no doubt about that. Then there are a some who are very good at one thing – but don’t have a clue about the big picture. Finally, there are those who just don’t have a clue!

So, the first issue is to find someone who can help you with what you need. I offer up this observation though – don’t get too caught up in finding someone with every item you have listed in your requirements document. Take a look at the bigger picture. Think about hiring someone who might be able to do more than one thing for you as well.

For instance, you may think you need someone with more than 5 years of internet marketing with a focus on B to C. The person who looks good from that standpoint may have that as their only Marketing experience – which may be ok. But, there may be someone who has 10 years of total experience in a variety of things including Product Marketing, MarCom, maybe a little customer support and has been doing internet marketing for the last 2 years only. I would bet that this person might bring a more interesting skill set and a better frame of reference to your company.

The same goes for industry knowledge. I find many companies get caught up with requiring that you have several years doing a specific job in a specific industry. Now, don’t get me wrong, I don’t think this is a bad thing – I just think it is a good idea to sometimes look ‘outside the box’. Many of us have a strong enough background to be able to come up to speed on a different product or technology very quickly. It is the skill set and the ability to generate ideas and implement improvements that is really key to a successful consultant. Bringing in someone from a different industry can sometimes bring in a whole new batch of ideas, processes, systems, etc. that could very well be exactly what your business needs in order to improve. I can’t tell you how often I have walked into a company and heard the same answer to so many of my questions – “That’s just the way it’s done in this business”. That is never the right answer in my book! Many businesses/technologies are quite incestuous. The same people move from one company to another and soon many of these companies are all functioning in similar ways. After a while they stop looking for new and better ways to do things because their way is all they know. Fresh eyes, with a diverse background, can be just the medicine for a company looking to break away from the pack. The right consultant can often become that catalyst for positive change.

The start of LKConsulting!

The life of a “consultant” is quite interesting. It certainly has it’s ups and downs – especially in this economy.  With the current downturn, there are many more “consultants” out there looking for work.  You don’t just get a job by asking around anymore – and it takes a lot more than just being good at what you do.

I know what you are thinking.  “Consultant” is a code word for “Out of work and looking to make some money until the next job comes along”.  I get it – it’s true in many cases – but not for me. 

What I can tell you is that, in my case, consulting came to me.  I walked away from a job in the fall of 1994 (for reasons too complicated to get into here) and immediately received a call from a company that I had worked with as a vendor.  They wanted to know if I was available to do a project for them – put together a study that I had the knowledge base to complete fairly easily.  This was the beginning of the first round of LKConsulting.  I then worked with a few more companies, thanks to contacts that I had made over the years and a reputation for getting things done.

As has happened several times since, a client wanted to hire me as a regular employee instead of a contracted one – putting me back into the more traditional workforce.  After moving around a bit more – thanks to companies merging and re-structuring – I went back to working for myself in 2002.  Since then, I have taken some time off, done a lot of volunteer work and even ran a small antiques business for a while – but I always miss the challenges of helping small businesses.  So now I’m back, working hard for clients, but keeping my independence as a “consultant”.