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10 Cardinal Rules for Business Growth

After over 30 years of participating in hundreds of businesses,
competing in at least as many different industries, with
companies marketing both products and services, you begin to
develop and accumulate some fundamental businesses axioms or
“rules of thumb” that seem to make more sense everyday and gain
more value in business practice as your career continues to
advance and evolve.

You like to think what you have learned and the business
knowledge you have retained along your long and varied career
path is unique, proprietary, or even “original”, but somewhere
deep inside you know that most of the things you hold near and
dear to your own business self identity probably were already
developed, practiced, and taught way before you ever entered
your first business conference room.

You sincerely hope that attempting to document your “Cardinal
Rules for Business Growth” in an article of this nature will
somehow make sense to other business people, or better yet,
your written contributions get added to other’s own personal
list of business do’s and don’ts.

Ultimately a business must sustain itself with profits to
continue its legacy. Without consistent sales revenues and
reasonable expense control it eventually makes little
difference what else you may attempt do to continue to advance
the future of the enterprise. Businesses need to grow because
those that are risking their hard earned investment in the
business logically expect a reasonable return on that capital.

The simple reality of business is, if there is not a reasonable
return on money invested in a company, it makes more financial
sense to put that same money in a fixed, guaranteed return
paper investment. Never again would you have to worry that your
competition is about to make your entire product line obsolete!

Before we get into my list of Cardinal Rules of Business Growth,
it is most appropriate to acknowledge two fundamental business
assumptions that relate to this list: 1) businesses are made up
of people, working together for a common cause, existing by
focusing on solving other people’s problems, namely “the
customer” 2) No matter how “good” you think you are, how
effective your team is and how much of the targeted markets you
have cornered, there is, and always will be, another company
attempting to do what you do “better”, cheaper, and more
consistently than you ever thought. Your ultimate goal is to
delay that from happening!

A “for profit” company must have a plan and a clearly defined
strategy, made up of tactics to achieve desired results. This
article will focus on tactical efforts one should consider, in
one form or another, to maximize the probability of continued,
profitable growth.

A very successful business mentor of mine once told me, “If it
is important enough to throw money at, it is important enough
to write down in black and white”… so if you have a business
plan, a business strategy and a few tactics to pull it off, be
sure to write them down! At least you have a fighting chance to
improve upon the matter at hand if it is written. Thoughts,
concepts and ideas are difficult to improve upon otherwise!

Proven Tactics for Business Growth:

Give priority to new product or service development:
Always seek ways to improve what you have to offer and develop
means to obsolete your own products or services before someone
else does

Find new applications for existing products or services:
Be sure to establish a communication means between your company
and your product / service users to determine how they really
use your products. Offering a financial incentive to “surface”
news applications helps too!

The “easiest” sale of them all:

You have already spent the money to acquire your customers and
build a relationships with them, why not ask what else can you
make or provide for them?

Know where to get all the answers:

ALL the answers about how your company is doing, where it
should go and what it should stop doing, reside within your
own customer base. Just ask!

“Buy” rather than “Build”:

Take a good look at your targeted industry. There usually is a
resourced limited company who offers viable products and
services that relate to yours. Consider buying them versus
investing the same money in an “organic” growth alternative.

Think “out of boundaries”!

If you just focus on US markets, someday you will find your
company can no longer effectively compete because someone else
beat you to the global market game board, the board the
business game of tomorrow will be played on

Go “E Commerce”!

Establish an effective means, via the Internet, for your
customers to educate and update themselves, solve their own
problems and order your products with a few clicks of a
computer mouse

Know when to say “No” and “Stop”!

The most effective business leaders know when to say “no” and
when to say “stop”! Making or doing something that no longer
makes financial sense needs to be dealt with decisively, no
matter the, “We have always made those” , “We have always sold
those” or “We have always done it that way” commentary.

Measure and publish everything:

Business practices can only be improved upon if they are
written, measured, tracked and periodically audited for
effectiveness. All results justify being shared with all
employees, good or bad. Always celebrate success publicly,
criticize poor performance privately.

There is always a price to pay for business growth. The process
is always laden with mistakes, unexpected surprises,
opportunities to learn new things, always offering “another
chance” for future growth opportunities. There is no clear
roadmap on how to best grow your company, each company has its
own growth challenges.

Hopefully these “Cardinal Rules for Business Growth ” stimulated
some creative thought to make your business growth tactics that
much more effective. In today’s global business environment the
competitive edge we strive for gets thinner every day, growth
is the price we pay to maintain that edge.

Business Branding – How Character Affects Customers and Your Business Image

The public buys far more than just your products, services and so-called image promotions. Whenever they interact with anyone or anything associated with your business, they are automatically branded emotionally, good or bad, by the totality of your business character.

Whether you are a small business or a large operation, it is immaterial. If that brand is found lacking at any time in the customer-relation scenario, their return to you as a future-paying customer will be highly unlikely, not to mention all of their word-of-mouth associations. If that doesn’t get your attention, then you and your business are in trouble already.

Brand marketing and brand character are certainly familiar business terms, but they are business-school jargon, nonetheless. All of those buzz words may sound great at board-rooom presentations and seminars, but often mean something else to customers.

While the highly-paid marketing gurus tell you to concentrate on presenting your product or service imagery, they fail to warn you that it is your organizational brand that does the real imprinting. What’s most notable is that the total character of your particular business imprints that brand on your customers’ emotions, a realm far beyond typical business education. That’s why I believe you should expect every business consultant to possess this kind of perspective.

As every interaction with your public is a so-called “moment of truth” or, better yet, “moment of judgment”, the public knows when they’re being burned by a hot poker; and they judge accordingly. A form of business branding is, therefore, created by you and your organization at every turn. It’s both an active and passive event. The customer merely views it, experiences its presence, engages his or her emotions, and then determines YOUR fate.

So, it’s time to make yourself aware of the quality of your business trademark as much as your products and services. It’s the only way to really distinguish your organization from the crowded and competitive business arena we call world markets!

Obviously every company promotes its products and services to gain market share for the purpose of profit. That’s no sin. Without realizing it, though, a poor organizational brand quality can scuttle that endeavor, especially when it is exposed as an integral part of the market-to-purchase-service process.

You can’t hide it. Emotional branding of your customers is especially created or dessecrated with every interaction at every level, whether that interaction is direct or indirect.

So, realization that business-branding occurs all the time is your first step, but a most-important one. While typical brand marketing of a product focuses mainly on product imagery, it is your public interactions that can force all of the expenses associated with marketing that imagery to crumble in a single moment. Point: As your organizational character is reflected, so goes your future success or failure!

In other words, dealing with the public especially exposes your organizational brand for what it really is. In total, every talk and every walk that your company engages in, regardless of size and business sector, refines or tarnishes your business-brand image. Here’s where the true corporate or business character, as displayed by your people in the form or disposition and attitudes, sets you up for profits and losses.

Lose the heart of the customer and all of that development, testing, marketing and expected profits will go literally up in smoke. The key here is learning how to recognize your business brand and keep it shining from within, not just on the surface.

Surprisingly, many highly educated organizations don’t realize WHY their business brand is broken. It’s pitiful to watch. Assuming it’s production or process related, management know-it-all vanity seems to get in the way from seeing the simple truth.

The Power of People and Emotions

Every business has managers TALK about the importance of people, but actually focus or WALK away from the people factors like character; and people define the totality of your business brand far more than any tool in your marketing arsenal.

It’s true that many CEOs and managers realize the importance of appealing to emotion. However, the branding tool that they usually choose to do the job is their product or service itself. They even attempt smiles and free coffee mugs which are not enough, because that’s not what customers want or need. Well, there’s much more!

First of all, assuming that values touted in mission and philosophy statements are sufficient for success can be a dangerous assumption in today’s competitive arenas. Character needs to be perfected at every turn, internally and externally.

For example, your programs may be internally late, not due to the inabilities of your people, but due to internal cutting politics, indecisions and a constant state of change induced by managers like a form of rearranging deck chairs on a sinking ship. I know this first hand.

In my 36 years of associating with various product development and product marketing teams, including 12 years with the successful Saturn Corporation, I have personally witnessed just how brand-marketing strategies have caused many fine organizations to lose focus. How? They have been led to conform to the lopsided thinking that branding applies more to a form of product and service imagery that induces lust more than warm emotions.

Externally, a business truly has to focus on product, price and marketing imagery, but directing all of it toward customer lust to buy is certainly a double-edged sword. For one, lust is the wrong emotion to appeal.

By its nature, lust is a sentiment that is never satisfied, and never enough to keep customers always buying from you. Here’s why: Those who lust are also fickle! Eventually the truth about your pricing, fair value, reliability, service and care can cause YOU to be judged by them walking with their feet and their wallets.

Price gouging especially personifies negative-emotion branding, and occurs when a company prices their products or services so that managers can make salaries and benefits beyond their true worth. I guess that’s supposed to be just too bad for the public. That’s capitalism, many say. In reality, gouging then becomes the business brand; and attempting to save the business face by donating to charities and politicians is viewed merely as an attempt to gain absolution. Some rebates kind of fit into that category, in my opiniion. The prices were a gouge to begin with!

A more sinister brand occurs when business allows itself to use manipulatable accounting practices like RONA (return on net assets) as the main benchmark for management bonuses. First, it allows accounting trickery through postponing of programs and reducing of head count to fake its financial health so that bonuses can kick in. That makes the company books manipulatable at the expense of the customers, the stock holders as well as employees. In essence, their manipulation put off the day when prices would naturally reflect fairness.

Well, the public is not stupid. They have a long memory when it comes to someone taking their money and delivering poor value, disrespecting them at the time of purchase or service. They even recognize when you route your employees. And they certainly know when they’re being gouged or manipulated just to sustain a business’ plan that is intended to win at all costs, namely theirs.

How many times have you paid full price for a quality product, but it still failed? How many times have you paid a high price while the company cut its employees to shreds with downsizing everything except upper management’s perks? That brands you as a nasty hot poker, because they know they’re paying for those perks.

Like I said, the customer is not stupid. As a result of their awareness, you are now expected to deliver quality products, quality services, and quality in their total buying experience; and that now includes quality pricing; hence, value pricing at employee discounts. After all, the public knows they’re overpaying for literally everything.

Failure to comply to customer expectations in any way brands you as an abuser, but brands them as being gullible, disrespected and undignified. Talk about negative emotions!

This concept of business or organizational branding is an image niche untouched by many business books. Now, don’t get me wrong. Plenty of training is going on, but not about total business branding, especially ethics and fairness in pricing for value rendered.

Yes, we have mission statements, philosophy statements and just a touch of team-oriented, feel-good training sessions. Yet, many businesses still seem to miss the mark, maybe not in every corner, but enough to make many CEOs cringe at market-share and earnings-reporting time; which only proves that customers have the last say, further proving that higher education does not always guarantee business success.

Few managers and business owners really take the TOTALITY of their business brand to heart, including personal communications and relations. Emphasis is so heavy on trying to make a profit that they overlook the one element in the formula that might assure that profit.

As products, processes and quality increasingly take the center stage, more and more companies have become oblivious as to why they are losing market share, and will risk being blown out of business entirely.

There is always a cause for every effect. Don’t let the negative-branding syndrome happen to your business or your company, even if you just work there. Make a commitment to improve the business brand. Don’t forget that every internal issue will come to light in some way that you may not now even imagine.

You can help yourself and your business by first paying attention. Accept the reality that the public fully recognizes when another product or service is better, and that they always vote with their pocket books. It is their right as much as it is their duty for economic self preservation.

Your product may be innovative, but a greedy price mark-up, for example, can dry out their emotions quite readily. That is just as much a brand failure as a recalled tire.

Yes, a failure to keep the customers’ emotions positive can be deadly to your bottom line. So, the time to be more alert is now!

And speaking of emotion, why do some products fail to sell, while others prosper? Simple: Contrary to today’s business doctrines, product quality is no longer enough! Content is no longer enough. The only way you can segregate yourself from your competition in this new century is to better the totality of your customers’ business experience; as that summarizes your business brand and appeals to your customers’ hearts where their buying and staying emotions originate.

So, the next time some market guru challenges you to brand market your products and services, make sure to include your total business brand. And make darn sure it isn’t just any old hot iron.

Why You Need a Business Plan

This article was originally called “Do You Need a Business Plan?”

The title was changed because in truth, every business needs a business plan. It’s a common misconception that business plans are used only for raising capital, as in “my bank wants to see a business plan before they will approve a loan,” or, “I need a business plan so I can get venture funding.”

But a business plan is really just what it sounds like: a plan for running your business. It’s an essential tool for making sure that nothing is overlooked.

The business plan will usually be divided into sections relating to the key activities of your business, such as Sales, Hiring, Manufacturing, and so on. In each section you will list the major goals and tasks to be accomplished, and the steps needed to accomplish them. The steps should be in the form of a schedule, with a clear description of when each task will be done, who will perform the task, and what resources are needed. For very small businesses you may plan a year in advance, but a more typical planning time frame is three to five years. Obviously your plan will be more detailed for the first year, and things will change over time – I’ll discuss that a little later.

In additional to these “operations” sections, your plan will have some informational sections that will be used in setting the operational goals. For example, what is the market opportunity that your company is pursuing? How do you know that the opportunity is real… what research have you done? Who are your major competitors, and what are their strengths and weaknesses? The information sections are especially important if you are using your business plan to raise capital, but they should not be neglected even if your company is self-funded. The information you gather about the market and your competitors is literally the foundation of your business plan.

The final key piece of your business plan is the financial section. At its simplest, this is just a running budget showing your projected expenses and income on a month-by-month basis, for the next 1 to 5 years. You can create this with a spreadsheet program.

In the operations section of your plan, you included a schedule of tasks, and that schedule should match your financial plan. For example, if you said that you would start advertising in April, you would spend $1500 per month, and the result would be a 20% increase in sales, then the $1500 per month advertising expense, as well as the increased sales, should be included in your financial plan.

Banks and venture firms will require the financial plan to be in a specific format; you may need an accountant to prepare this. But even if that’s the case, start will a financial plan that you create and understand. Make sure the financial plan matches your operational plans, and be sure you understand how every number was determined!

You’ll learn a lot in creating your business plan, and avoid many mistakes. But that’s just the start. Once your business plan is complete, don’t put it away! Consult it regularly. Be sure that you are on schedule to accomplish your operational goals. Be sure your actual income and expenses match your financial plan. And if reality doesn’t match your plan, figure out why and adjust the plan accordingly.

One small business owner initially projected that 65% of her business revenue would come from services her business provided, and 35% from product sales. Six months after the business was launched, she discovered that, although total revenue was very close to the plan, the ratio of service to product revenue was exactly the reverse of what had been projected. This raised several possibilities. Perhaps not enough effort was being spent to promote the service side of the business. Or perhaps the product portion of the business was a simply bigger opportunity than originally thought, and more emphasis should be placed there! In either case, the owner needed to do some additional thinking and update the business plan based on what she had learned. She talked to clients, met with product suppliers, and eventually decided to expand this portion of her business, resulting in significantly faster growth than originally projected.

Based on experiences such as this, I recommend that small businesses review their business plan at the end of each quarter, and that they conduct a thorough update of the plan at least once a year.