Written by Dave Lavinsky on Wednesday, November 12, 2014
Negotiating is one of the most powerful skills you can use regardless of your business type.
Not only are there ample negotiating opportunities when buying, selling, or managing for growth; being able to negotiate well can mean the difference between reaching your desired outcome or not.
Make it a habit to negotiate all important items and it will add up in a major way. For example, think of what it would do to your bottom line to reduce expenses by 10% across the board!
Below are 7 "sneaky" negotiations tips. There not "sneaky" in that they're not deceitful or lying (which I do NOT recommend). Rather, they are techniques that you probably are not familiar with, don't do as much as you should, and which DO work.
Tip #1: Schedule the Negotiation Close to a Deadline
Ideally, you can schedule the negotiation close to the other party's deadline by which they need a completed agreement. This will put you in a more powerful position, because they are more motivated than you.
You would know their deadline by gathering research about them in advance. Scheduling the negotiations later also gives you more time to do further research and prepare for the meeting so you'll be even more effective when the time comes.
If you are the buyer, keep the end of the week, month, or year in mind. They might have internal goals and quotas in their company and will be willing to give away more in order to reach them.
Tip #2: Don't Get Emotionally Attached Inside
There are two main ways to get overly attached. The first is attachment to outcomes. The reality of negotiating is that any time you go into one, you may have to walk away, or only get part of what you wanted.
Be willing to do your best and then accept whatever outcome takes place. Fact: when you play the game you will lose some of the time. But when you cling to outcomes too much, you lose more of the time.
Be willing to walk away. This brings us to the second way to get too attached...by reacting to the other party, their attitude, and what they say (which may be designed to get you to react). Stay calm and patient, no matter what they do. Your calmness will help you think clearly and also make you appear more powerful.
Tip #3: Don't Look Too Attached on the Outside
If you're attached inside, it will probably show through your body language-so work on your inner game first. Then, pay attention to your physiology and what your posture is conveying.
Without even saying a word, you can give the impression that you're willing to walk away from the deal and that doing so wouldn't be a big deal for you. Think about how you would sit, stand, lean, listen, and the tone of your voice while speaking, and try to act the part.
You'll find that just paying attention to your body leads to it correcting itself and conveying the image you want. Try to get in the right state of mind before the negotiation starts, and check in with yourself throughout to make sure you're not slouching or appearing less confident.
In reality, you're sending messages through your body language that many salespeople or experienced negotiators are trained to read. The only question is whether to pay attention it to yourself or not. And the answer is "yes!" Try it and see.
Tip #4: Never Be the First Person to Name a Figure
For example, if someone asks you what your firm's hourly rate is, don't just react and answer it right away! You'll be tempted to blurt out something that is less than you wanted by the time the meeting is over.
You could respond by asking what their budget is for the project with which they need help. A low-anxiety way to turn it back on them is to respond with a clarifying question. Then, ask a second question like the one above to the other party that's aimed to find out what they can pay, or are willing to pay.
Tip #5: Always Ask for More than You Need
If you can't avoid naming the first figure, then make the best of it by asking for more than you need, to start the negotiations with plenty of room to come back down later if you must.
Sometimes the other party will accept this higher offer right away! These are the exceptions, but always do it anyway because you never know.
So if someone asks for your hourly rate, as mentioned above, you could answer with a higher hourly rate than you would typically bill. This also gives the impression that they are getting more value in the deal, as those who "typically" bill a higher rate more are usually seen as more competent professionals. (I would then suggest that if you get the deal, to work extra hard on it to make it worth the higher price.)
Tip #6: Never Take the First Offer
If you CAN get the other person to name the first figure, here's what to do-balk, then ask them to do better. I know a few guys who do this out of habit no matter how low the starting price is.
When they name their figure, try to look shocked or surprised. This does wonders to manage expectations for the same reason that starting with a lowball offer works. Then, even if it's a lot better than you expected, calmly and assertively (but not arrogantly) state "Is that the best you can do?" or "I think you'll have to do better than that."
Tip #7: Don't Get Suckered by the "Rules" Trick
Don't think for a minute that all contracts must be signed as-is. If the other party has a contract to sign, feel free to cross out anything you don't like in it. You can also add items you feel should be in there. Don't just sign away your chance to improve your outcome! It's all negotiable.
Some companies or salespeople will try to tell you that the contract can't be altered. Find out if this is truly the case by asking where it says that. Is it law? Is it company policy? Has an agreement ever been changed before? Who could approve it? Find this out and have them get permission from their manager if needed.
If the boilerplate language of the agreement really can't be altered, take this as a cue to go back and renegotiate one of the previous items by saying something like "Okay, well if I can't change this paragraph, lower the price by $X and you've got a deal."
There are dozens more negotiating and persuasion tips I discuss in "Getting What You Want." The key is for you to not only know these tips and tactics, but to use them in the daily course of running your business.
Written by Jay Turo on Wednesday, November 12, 2014
It is hard not to laugh when I hear tired old refrains like "Nobody reads business plans anymore" or "In a world of lean startups, there is no time for strategic planning."
Why do otherwise intelligent and well-meaning businesspeople say and think things like this?
Well, for starters as human beings we all struggle to emotionally grasp the impact of the history not made, of the things that don't happen.
You see, poor strategy does not manifest itself as much in high profile flame-outs as perhaps it did in days of yore (see Pets.com, eToys, etc.) as it does in nothing of note ever being accomplished.
As in companies that grow slowly, if at all.
And make no profits.
And are led by entrepreneurs whose talent and work ethic doesn’t translate into the kind of pay and lifestyle they seemingly deserve.
Missed opportunities, lost years, unrewarded work.
These are the real but hidden costs of poor strategy.
Now, the other big misconception around strategic plans is confusing the “form of deliverable” with the process itself.
Again, this is a case where otherwise smart and well-meaning businesspeople make an obvious, but critical error: They equate the plan with a physical document.
And when done poorly, more often than not a document that is only tangentially connected to the “real business” it supposedly represents.
Now, the good news is that the literature is filled with great best practices - tested over thousands of businesses - as to how to lead strategic planning processes that are connected to the actual marketing, sales, operations, and finances of a company.
Even better news: Inexpensive, effective, and everywhere accessible business software-as-services are connecting the dots between “big” strategy and the “small” to do’s, tactics and action items at the living, breathing heart of a business.
Tools like CapitalIQ, Simplycast, The Resumator, Box, Grasshopper, Wufoo, Smarsh, IfByPhone, SnapEngage, Docusign, Hootsuite, Infusionsoft, and Interspire that automate traditionally laborious and repetitive business functions.
This is where 21st Century Strategy lives.
Now, as for those who prefer to cling to their tired clichés, well I guess they can always reminisce about how things were back in the 20th Century.
But for those who need more than nostalgia to sustain them, there has never been a better time to win by doing strategy right.
P.S. Like to demo our dashboard offering? Then Click Here to learn more.
Written by Dave Lavinsky on Monday, November 10, 2014
This article presents 14 times and ways when you can negotiate to get a better deal for your business.
After reading this, I want you to choose the ONE most significant thing in your business that you must negotiate in the near future.
I'm not talking about buying a used swivel chair on Craigslist. I'm referring to one of the various opportunities that you have as an entrepreneur to determine your own end results-possibly saving thousands or tens of thousands of dollars-on some significant expense or transaction coming up.
Since so many things in business are negotiable, keep negotiations top of mind. Generally you should always try to negotiate as you often have nothing to lose.
Here we go...
Negotiating with Suppliers
1. Cost of high-end purchases - Typically, items you buy in the hundreds or thousands of dollars have a more involved sales process, so the vendors offering them are more likely to adapt and negotiate in order to secure your business. They also have more leeway between their cost and what they charge than if they were selling commodities.
2. Payment terms - Oftentimes you might rely on customer payments to cover your purchases. IF so, you'll ideally want to pay your vendors after your customers pay you. So negotiate this preference
3. Quality/Scope of Offering - Maybe your budget is limited and you just can't pay more for something than you have. Don't stop negotiating! Just change what you ask for. Suppliers might be able to offer you better service, some freebies, or an upgraded package just by asking for it.
4. Volume discounts - If you're a startup and don't have volume yet, then share your vision with suppliers of how you will grow and what your company will become. Use this vision to negotiate a volume discount over time that starts immediately.
5. Office Space - It's funny how many people walk over dollars to get to the dimes. The same people who drive 2 extra miles to pump gas at a station that's $.02/gallon cheaper will not bother negotiating on major purchases and save thousands. Your working space is one of your highest expenses-so fight for the best price!
Negotiating with Employees
1. Salary - Obviously, when hiring a full-time employee there will be salary negotiations. This is the final part of the hiring process and it pays to prepare as it might save you thousands of dollars per year. And, with freelance service providers, they will often offer discounts off their regular hourly rate in order to get a first project started with you, or in exchange for consistent work.
2. Equity or Partnership - in the beginning, you might not have the cash to offer real players a full-time job, but you can attract them by offering a piece of the pie, if you can show that the opportunity is great enough. You can avoid paying market-level wages.
Negotiating with Investors and Lenders
1. Basically, everything you agree on with an investor or lender is negotiable, including:
- Loan amount
- Interest rate
- Length of time for repayment or exit
- Personal guarantee
- Payment amount and frequency
Negotiating with Buyers
1. Price - Your customers generally want the lowest price, and you probably want the highest. So try to offer other concessions besides price to close sales when customers won't pay as is. For example, you can include an additional product or service to influence the customer to buy.
2. Special Discounts - These are made on a case-by-case basis, and should be used sparingly. These are different from sales, which is a pre-emptive concession to get people in the door. Only agree to lower your price in exchange for something else, or if they commit to buying now.
3. Offering bonuses - These are the extra add-on items you can offer the customer that add value but don't affect your cash flow as much. You might upgrade or further personalize the product or service you offer-anything to sweeten the deal.
4. Extending financing or payment plans - This is another way to keep your price high and still make more in the long run, if you don't mind waiting a little longer and also not being able to collect a certain percentage of the remaining payments (hopefully a small number).
5. Collecting accounts payable - If someone falls behind in making payments to you, the best thing to ask them is how much they are able to pay, and when. Let them tell you...and this will start the negotiation and give you a better idea of what's possible.
Which of these negotiating scenarios do you see coming up soon on your radar? Which could you make happen now? What would you stand to gain by having the courage to ask for more?
And what do you stand to lose by asking? The odds are, nothing. The worst they can say is "No." Don't worry...few deals have been lost because someone got offended by an attempt to negotiate. They may even respect you even more for having tried!
Now, since the first step of negotiating is to begin with the end in mind, and picturing a clear outcome in your mind, take the negotiating opportunity you choose and break it down in to specific objectives, like "Save 25% on our office's new security system" or "Work a deal with our new CFO to work for $2500/month in addition to 10% ownership" or something equally specific. The time to negotiate starts now.
Written by Dave Lavinsky on Friday, November 7, 2014
Last month, author Brad Stone released an interesting book called, "The Everything Store: Jeff Bezos and the Age of Amazon."
The book chronicles the story behind Jeff Bezos and Amazon, but there's really only one paragraph from it that I'd like to focus on herein. That paragraph reads as follows:
"They [Amazon] would let other more experienced retailers sell everything on the site via Amazon's Marketplace, and Amazon would take a commission. Meanwhile the company [Amazon] could watch and learn. That was something we did quite well, says Randy Miller. If you don't know anything about the business, launch it through the Marketplace, bring retailers in, watch what they do and what they sell, understand it, and then get into it."
So, let me break this down for you if it's not apparent. Rather than selling items like apparel and kitchen items itself, Amazon launched these categories through the Amazon Marketplace where other vendors sold them.
In doing so, Amazon was able to see what products sold well and how they were sold. And then, when a product sold well, what did Amazon do? Well, they started selling the item themselves in the main Amazon.com site.
So, what is this strategy called?
Market Research. That's right, Amazon.com went from an online bookseller to the WalMart of the internet by doing market research. Because with the right market research you can avoid the missteps that most companies and entrepreneurs make.
So, what kind of market research will help you grow your company? Below are the key research areas you need:
In assessing your industry or market, start by defining how big it is. Why? Because if it's too small, it's probably not worth entering. Define your market as clearly as possible. For example, if you manufacture prosthetics, look at the size of that market, not the entire healthcare market.
Next look at market trends. For example if the market is shrinking or consolidating, it's probably not a great market to enter; unless you have a revolutionary new product that could shake things up.
Understanding your target customers is absolutely critical to your business' success. In fact, one of Jeff Bezos' hallmark strategies is "We start with the customer and work backward."
In your research, you need to precisely identify and define who your customer is. Define their demographics such as what gender they are, how old they are, where they live, etc. If a business customer, also define their role in their company and the type of company for which they work.
Then move to the psychographic questions. What do your customers like to do in their free time? Who do the like on Facebook? Etc.
The more you know your customers and what make them tick, the better job you will do in creating the products and services they want, and effectively marketing to them.
Identify who you are top competitors are. Importantly, like Amazon did, determine what has worked well for them and what their customers are buying.
The old investor saying is very important here, which is as follows: "if you have no competitors; maybe you have no market." What this means is that if customers aren't currently buying a product or service that serves the need your company fulfills, then maybe that need and thus market doesn't exist.
The more you understand your competition, the better you will do in creating a winning strategy. Fortunately, with online tools, you can learn a lot about your competition. You can find out the demographics of their website visitors, what other sites those visitors frequent, what other companies they like on Facebook, and so on. Clearly this information will help improve your marketing and overall strategy.
The final category or research to conduct is financial research. Here the goal is to develop benchmarks. For example, what is the average Cost of Goods Sold in your industry? What percentage of your revenues should staffing costs comprise?
By understanding these benchmarks, you can do a better job in determining financing needs and also measuring and improving your performance over time.
We all know that knowledge is power. And when running a business, the knowledge you need is market research. With it you'll have a better strategy and your likelihood of success skyrockets. Without it, you're shooting in the dark. I prefer the former.
Suggested Resource: If your business plan and/or strategy is missing critical market research, you will fail. Or worse yet, if your plan or strategy is based on faulty research, you're doomed. Click here to learn how my team can quickly and affordably conduct your market research for you.
Written by Jay Turo on Wednesday, November 5, 2014
I had a good fortune this past week to moderate a strategic planning session with the CEOs of seven of the largest and most well respected highway construction firms in the country.
These thoughtful executives meet on a regular basis to share strategies and best practices, to compare notes on equipment and technology systems, on asset and equipment management and perhaps more than anything else on leadership, management, and the “people” development within their organizations.
Above all else, it was the conversations around this last point that struck me as to why these executives led companies that, on average, had been in business for more than 60 years – pivoting and weathering various and multiple storms in their notoriously cyclical industry where the overwhelming majority of their competitors had not.
The discussion brought to mind one of the greatest and most under-rated business books of all time – Arie de Geus’ The Living Company, where the author shares a lifetime of research and study as to why some companies and organizations “live…through the upheaval of change and competition over the long haul.”
As de Geus’ so eloquently writes:
The idea of a living company isn't just a semantic or academic issue. It has enormous practical, day-to-day implications for managers. It means that, in a world that changes massively, many times…you need to involve people in the continued development of the company. The amount that people care, trust, and engage themselves at work has not only a direct effect on the bottom line, but the most direct effect, of any factor, on your company's expected lifespan. The fact that many managers ignore this imperative is one of the great tragedies of our times.
This inspirational and almost idealistic point may seem contestable in our age so dominated by tech high-flyers that seem to have gained their prominence through such a powerful combination of IP prowess, network effect, and first-mover advantage that really any company culture and any collection of reasonably talented individuals could run them well.
For a short time, maybe yes.
But to sustain themselves over periods measured in decades, to transition leadership and management through a generation (at the meeting I moderated, there were two third generation businesses, and one fourth generation one) requires a robust, flexible, and truly “living” culture.
And that in turn requires something we don't talk nearly enough about in business anymore – leadership.
The kind of leadership that once was the obvious expectation for persons granted the blessing and privilege of being at the head of an organization of any size.
The type of leadership that does not sacrifice the long-term for the sake of the short-term.
The type leadership whose goal is not “an exit,” but rather a contribution - to shareholders, to employees, to customers, to community.
Leadership that knows that a handshake and one's word is a far better and more appropriate form of agreement between gentlemen and gentlewomen than a contract can ever be.
And leadership that recognizes that to survive and prosper through four generations is both an amazing accomplishment, and a charge to keep.
The charge to not only match the good and hard work of those that have gone before us.
But given the opportunities afforded by our technological and global age, to far exceed them.
In growth and profits, absolutely.
But, in character, principle, and doing the right thing too.
Written by Jay Turo on Wednesday, October 29, 2014
In my posts over the past few weeks, I have talked about the power of business intelligence dashboards, and why companies that use them enjoy triple the revenue growth and double the profit growth of companies that don’t.
This is driven by the simple two facts that a) businesses today collect more data than ever before and b) wading through and making sense of it all is overwhelming as this data is collected and stored in multiple locations, including in CRM and ERP systems, in accounting software, in advertising and marketing platforms, in social media sites, and so on.
So it is the executives who quickly access this data - and connect the dots between it all - that incrementally but inexorably make better strategic and tactical decisions, gain competitive advantage, and win.
Intrigued, but not sure exactly how an executive dashboard would work for your business?
If so, you’ve come to the right place, because my team and I have created a special webinar where I share best practices as to how today’s best run companies use executive dashboards to:
• Identify the most important business metrics to track
• Develop real-time visibility into their organizations
• Improve employee performance
• Make more intelligent business decisions
• And ultimately grow sales and profits
Importantly, this webinar will neither be an academic lecture nor a sales pitch in disguise. Rather, it will be an intense hands-on workshop where I will share key tips and tactics as to how to harness the power of executive dashboards in your business right away to grow revenues and make more money - while working less and having more fun.
Sign Up Now
Note that to promote interaction, we are limiting this program to no more than 35 attendees. So click below to register before the spots fill up!
Look forward to your attendance!
Written by Dave Lavinsky on Wednesday, October 22, 2014
The biggest aspiration of most entrepreneurs and business owners today is to grow and then sell their businesses. And why shouldn't it be? Selling your business creates more multi-millionaires than any other endeavor.
The key issue however is this: are you growing your business the right way, and are you focusing on the right things? You see, when it comes time for buyers to appraise the value of your business, they might find different things to be important than you do. And the last thing you want to do is focus your time developing aspects of your business that buyers don't value. Particularly when doing so forces you to neglect the things they do.
Below are five key questions that will determine your business' value. Answer them honestly. And then work to improve your position on each.
1. How replicable is your business?
When corporations consider buying a business, they make a "build" or "buy" decision. That is, they ask whether the time and money it would take to build a similar business from scratch is greater than the cost to buy the business from you now.
As such, the more unique and less replicable your business is, the better. So think about how replicable your business is. For example, could another company easily replicate your products or services? Could they easily hire and train a team as good as yours? Would it be simple for them to build a customer base like yours?
Answer these questions honestly and focus on building a profitable AND harder-to-replicate business going forward.
2. How easy will it be to run your business after acquisition?
Why do we pay a premium for a new automobile versus a used one? Because we know the new one doesn't have any problems. It hasn't gotten into any accidents. It doesn't have an oil leak, etc.
Similarly, acquirers will pay a premium for a business that is in great "running condition." Sure, every business will have its challenges, but a business that is simple to run, like a new car, will be highly valued.
So, let me ask you this: if you sold your business today and retired, would the new owner be able to easily run your business thereafter?
- Do you have systems in place that enable your business to run consistently every day?
- Are your employees trained to handle all key issues that arise?
- Will your customers continue to buy from your company even though you're no longer a part of it?
Always think how your business will run after you're gone. And if currently it wouldn't run smoothly, take actions now so that it will.
3. How has your business performed financially?
Unless the majority of the value of your company is in unique and patented technologies, buyers will thoroughly review your financial performance.
Clearly, they want to see strong revenues and profits. And they want growing revenues and profits. If your revenues or profits are on the decline, many buyers will project that decline will continue, and thus significantly decrease the valuation of your business. Fortunately the opposite is true, so do whatever you can to have strong and growing revenues and profits.
4. How stable is your customer base?
Your customers are the lifeblood of your business. The revenues you generate from them pay the bills and ideally fund great profits.
As such, acquirers will scrutinize your customer base. And the most important question is how stable that base is. For example, do they expect 50% of your customers to leave after the acquisition? Or 25%? Or 10%? Or none?
Clearly, the more stable your customer base, the more attractive you are to an acquirer. In the ideal situation, you have signed contracts with customers so the acquirer has complete certainty they will be retained. If not, ideally your customers have gotten in the habit of buying your products or services, or have a solid preference for them, so their continued patronage is likely.
Likewise, having a diversified customer base, as opposed to just a few very large clients, helps. Because with fewer, larger customers, there's more risk that one will leave and take a large chunk of your revenues with them.
5. What are the odds of sustainable future growth?
When you combine the four questions above, much of what the acquirer is trying to answer is what your odds are for future growth.
For instance, if you have a stable customer base, your financials are strong and growing, your business is unique, and it will be easy to run your business post acquisition, then your odds for future growth are great and you will have tons of suitors.
And tons of suitors interested in buying your business means that they will bid the value up and up, so when you sell, you will get a great premium. Which is probably one of the reasons you started your business in the first place. So do this, and make it happen!
Suggested Resource: If you want to build a sellable business, watch this free presentation called "Million Dollar Exits: How to Build a Business You Can Sell For Millions of Dollars." It starts by explaining the 3 most dangerous trends facing entrepreneurs today. Click here for this must-know information.
Written by Jay Turo on Wednesday, October 22, 2014
Last week, I shared why business intelligence dashboards are now a must have for executives seeking to better understand, leverage, and ultimately profit from the treasure troves of data surrounding their businesses.
This data includes insight from their companies’ web and social media traffic, from its e-mail send and open rates, from its lead tracking systems and sales logs, from its product fulfillment records, and from its accounting software as it records revenues, expenses, and cash flows.
Pretty basic stuff, eh?
Well, maybe when viewed one source at a time, and/or over a limited time period with just a few data points, but given that a business doing as little as $1 million in revenues now has on average more than 20 data sources – from software services like Google Analytics, Salesforce, Quickbooks, ZenDesk, to dozens of Excel files and spreadsheets of every type and purpose, figuring what to do with it all quickly gets overwhelming.
And in business, when something gets overwhelming, what happens?
Yes, all of these treasure troves of data, insight, and intelligence just gets ignored.
Reports aren’t run. Or when they are run, they aren't read.
And when they are read, they are not really mined for insight, for “aha” moments and breakthroughs, for competitive advantage.
This sad state of affairs is the unfortunate reality for most executives in this information-overloaded business world of ours.
But not for everybody.
There are a select few that as opposed to being overwhelmed, are energized by all of this precious and unprecedented data.
That use it to both inform and confirm their "gut."
And when the data and their guts disagree? Well, more often than not they let the data hold the trump card.
These executives worship at the altars of both big and little things.
Big things like strategy, mission, vision, values, and culture.
But little things too like form conversion stats, proposal close ratios, page bounce rates, call hold times, quick ratios, and net margin growth to name a few.
How do they do it?
Well, first per the above, they have a functional relationship with data. They don’t whine about it nor are they consumed with how much of it there is.
And secondly, they don’t try to sift through and make sense of it by themselves.
They let technology do a lot of work for them. Both predictive analytics technologies like Civis, Kxen, Foresee, Angoss, and Verisium.
And strategic and business intelligence dashboard technologies like Domo, Pentaho, Birst, GoodData, and my firm Guiding Metrics.
Technologies that find the signals in the noise, and that help them win both the big and little games of modern business.
So now, how about you?
To Your Success,
P.S. Like to demo our dashboard offering? Then Click Here to learn more.
Written by Dave Lavinsky on Friday, October 17, 2014
No great companies have just one employee. None. Which means that in order to grow your company, you need to build a great team.
In building your team, there are two equally important but distinct parts: recruiting great employees and expertly managing them so they perform at their best.
1. Recruiting Great Employees
Recruiting great employees requires you to: 1) determine who to hire, and 2) hire the right people.
Determining Who to Hire
In determining who to hire, you need to assess both what job functions you need now, and what functions you'll need in the future. This will help you find the right people.
Consider this example: you need someone right now to manage your marketing. So you hire a marketing manager. A year from now, your company is doing well and you hire four more people as part of your marketing team.
Now here's the question that arises: is the person you initially hired for the marketing position the right person to lead your marketing team? Sometimes they are, but often they aren't. Since performing in a role yourself is a very different job than managing a team.
So, the question you need to ask yourself when you initially hire the marketing person is this: should I hire someone simply to meet my short-term marketing goals, or should I hire someone that can fill my short-term goals and who could also manage and grow my marketing department. The latter hire will typically be more qualified, and more expensive, so making such a decision is important.
Another tip when determining who to hire is to conduct a return on investment (ROI) analysis on new positions. That is, what expected return, typically in terms of increased profits, will the business generate in return for hiring each new staff member. The less funding you have in your business, the more important this analysis becomes in choosing who to hire now.
Hiring the Right People
There is an old and important saying in management, "Hire slowly and fire quickly." You hire slowly since it's critical to get the right people in your organization. And you fire quickly, since bad employees can ruin the morale and productivity of your entire team.
The process of hiring the right employees starts with sourcing them. You can source or find employees from a wide range of places, from college job boards to posting classified ads. For each open position, think about the best places to find qualified prospects.
Once you find qualified prospects, the key is to weed through them to find the top performers. While interviewing prospective employees is key, remember that someone's interviewing skills are not as important as their on-the-job performance. That is, someone can be great during interviews, but not so great on the job.
To overcome this challenge, delve into the prospect's performance in their last jobs and, as much as possible, give them tests to see how they might perform in your company. With regards to tests you give them, treat their performance on them as their best possible work. While they can refine their skills with training, prospective employees generally give it their all on such a test. So, if they score mediocre, they are not a good prospect.
2. Expertly Managing Your Team
Your job as a manager doesn't stop once you've recruited a great team. Rather, you need to expertly manage them. We see this in sports all the time; one team has incredibly talented players, but they still don't win the championship.
Key to your company's performance is motivating and managing your employees so they work collectively as a team and are highly productive.
Among the many techniques for accomplishing this, here are two of my favorites:
1. Let Your Employees Set Goals for Themselves
Employees will perform much better when they've set their own goals, rather than goals being dictated for them. So, have each employee set goals. Then review those goals with them. As needed, persuade them to modify their goals to better align with company goals. Even when you do this, they will feel personally accountable for achieving their goals.
2. Conduct Performance Reviews
If you don't meet with employees and review their performance, they won't know whether they're doing a good job or not. So, meet with your employees periodically to discuss their performance versus their goals, detail what they are doing well at, and identifying areas for improvement and your suggestions to achieve such improvement.
Your Team Allows You to Win the Game
We all face competition in our businesses. And the difference between the winners and losers is often the quality of the teams. Clearly, if your marketing manager is better than your competitors', and so is your sales team, your production team, etc., you're going to win every time. So, focus on building your dream team so you emerge victorious.
Suggested Resource: Building Your Dream Team is a comprehensive video program that takes you through the four phases of building an outstanding team, which are: 1. Building a Founding Team, 2. Determining Who to Hire, 3. Hiring Superstars, and 4. Expertly Managing Your Team. Click here to learn more.
Written By Dave Lavinsky
Written by Jay Turo on Wednesday, October 15, 2014
Last week, I wrote about the power of business intelligence dashboards.
How, for the first time, smaller businesses can harness the power of big data to more efficiently and profitably manage their companies.
Some readers expressed skepticism that this "stuff" actually works.
That it is just more "noise” that causes entrepreneurs to get “lost in the weeds” versus long-term thinking and planning.
There is some truth to this.
Heck, “Big Data” at its worst is probably best personified by Wall Street “quant jocks” who equate positive expected value "bets" with larger, more foundational truths of right and wrong, and of good and bad.
To these concerns, let me offer a few suggestions as to how to best utilize business data to support, but not drive, leadership and managerial decision-making.
The first point is that for the vast majority of small businesses “getting lost” in the data is the least of their concerns.
A far bigger one is simply analyzing anything more than the barest minimum of balance sheet - "i.e. How much money is in the bank?" and profit and loss statement - i.e. “What were our sales last month?” data.
And when broader data, like the number of incoming leads, sales proposals, average call hold time, marketing spend per action, e-mail open and click-through rates, is analyzed…
…so much of it is either incomplete or just flat-out incorrect to make doing so an exercise in futility.
AND the data that is complete and accurate sits in so many places, Excel worksheets on the sales manager's computer, deep in a little understood (and used) CRM, in the reporting functionality of software as services like Grasshopper, IfByPhone, Constant Contact and Google Analytics to name just a few…
…that a way too high percentage of the time and energy set aside to analyze it is outright wasted in simply accessing the reports from the data sources that house it!
The simple answer to these challenges is to utilize a best-of-breed business intelligence dashboard that:
• Automatically collects and updates all the data in one easy to access place;
• Has alerts built-in to flag incomplete or way-out-out-the ordinary data; and,
• Is arranged and presented in a visual and formatted way that works for the executive reviewing it.
But it goes deeper than this.
You see, leading and managing a business based on proper data collection and analysis is no longer a choice - it is a necessity.
Because all of our best competitors are doing it.
And doing so along with proper and appropriate strategic repositioning as the consistent and correct interpretation of the data allows, affords, and demands.
Or, as David Byrne of the Talking heads once so famously said “This ain't no party…this ain't no disco…this ain't no fooling around. “
You see, when it comes to data-driven decision-making, it has become a matter of going big or staying home.
As in admitting that one is really not that serious about growing and sustaining a business of lasting value - one agile enough to adapt and evolve in the face of technological and marketplace change, and of competitive threat.
Now, I don't believe this.
No, the best entrepreneurs I know are as serious as they can be about not just surviving but thriving in this massively opportunity-filled world of ours.
Just take it one step, one click, one API integration at a time.
Sooner than you think, your business will be running more responsively, more nimbly than ever.
Then watch the profits follow.
To Your Success,
P.S. Like to demo our dashboard offering? Then Click Here to learn more.
If you want to raise capital,
then you need a professional
business plan. This video
shows you how to finish your
business plan in 1 day.
to watch the video.
"The TRUTH About
Most entrepreneurs fail to raise
venture capital because they
make a really BIG mistake when
approaching investors. And on
the other hand, the entrepreneurs
who get funding all have one thing
in common. What makes the difference?
to watch the video.
The Internet has created great
opportunities for entrepreneurs.
Most recently, a new online funding
phenomenon allows you to quickly
raise money to start your business.
to watch the video.
"Barking orders" and other forms of
intimidating followers to get things
done just doesn't work any more.
So how do you lead your company
to success in the 21st century?
to watch the video.