Category: business advice

  • Destroying your brand

    Destroying your brand

    One of the constant business tips in the last few years is that be competitive in the new economy an enterprise – big or small – has to blog, tweet and have a credible online presence. But there is a downside to this, a business or individual that lets too much hang out runs the risk of trashing their brand.

    Two recent examples of this are a PC Repair business on Queensland’s Sunshine Coast and a bar on the Gold Coast, there’s no links to the businesses in this post as the intention isn’t to trash their brands any  further.

    Customer service is always a tough business and the Gold Coast bar their blogger, who bills themselves a “jaded bar worker” and is obviously one of the younger members of the staff, recently wrote a post on customer “whining”. Some of the whines include;

    • asking to change the music
    • wanting a drink in a different glass, or with less ice
    • preferring a decent head on a beer (referred to as “foam” in the post)
    • asking for a table to be cleared
    • complaining about a wobbly table

    While all of those customer requests can be irritating, and sometimes unreasonable, there’d be little sympathy for the bar staff dealing with these complaints from any hospitality professional or a customer expecting any standard of service.

    It appears the blog’s intent is to be a local, chatty version of the successful Waiterrant blog whose author, Steve Dublanica, chronicled the adventures of New York waiter. Waiterrant was good for Steve’s brand, but would have been disastrous for some of the restaurants he worked at.

    Steve got around this problem by remaining anonymous until he landed a book deal – always a bad sign for a blogger – along with never identifying the establishments he served at.

    While whining about customers is a necessary pressure relief for anyone serving the public, it’s not a good idea to do it publicly unless a particular patron has done something spectacularly rude or stupid. Asking to clear a table or for less ice in their drink does not qualify as even being unreasonable.

    By just moaning about the typical day to day work that most of us have to deal with, this blog is not helping the bar’s brand. They might want to consider shutting it down or getting a more senior person to write or edit it.

    A little further North on the Sunshine Coast, a local computer tech has built a successful YouTube channel with 20,000 subscribers based around his rough, Aussie larrikin persona featuring some very, very robust language and views.

    With eight million views, the YouTube channel is doing well, but as an advert for the business it doesn’t portray his outlet in a particularly positive way and as the video clips become more popular, the damage to the shop’s brand becomes greater – along with the risks given he’s already had one legal threat against him .

    Online channels give us the opportunity to get our businesses before the world but with every opportunity comes a risk. When we post a blog, video or tweet online the entire world can see what we’ve said.

    Understand those risks – and they are very real – and be careful with what you post and which staff members you trust to post on your business’ behalf. What might have once just upset a few people can now turn the market against you.

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  • When the smiling stops….

    When the smiling stops….

    I was asked a while ago why I stepped away from my PC Rescue business despite it doing well.

    The reason was I’d stopped smiling. I found myself dreading calls from customers.

    When serving your customers becomes a chore, when you spend more time whining and moaning about your clients or you start fearing their phone calls, then you’ve crossed the line in the sand and it’s time to move on.

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  • The line in the sand

    The line in the sand

    Albert Einstein is quoted as saying the definition of insanity is doing the same thing over and over again and expecting different results. In business, we have to draw a line where we decide what’s working and what has failed.

    Problogger’s Darren Rowse recently discussed with Smart Company his journey of becoming a professional blogger. After experimenting with his blog, and finding the niches that worked for him, the turning point came with an ultimatum from his wife;

    “My wife humoured me for a long time, but eventually gave me an ultimatum, saying that I had been talking about this as a business but hadn’t been treating it as one. So I put more time into it, and then set myself a six-month goal. I was either going to be full-time by that point, or I would get a real job. And that’s what kicked things off, like me approaching advertisers directly and that sort of thing.”

    The line in the sand is a critical point for our business ideas. We need these self imposed deadlines to measure when we’re wasting our time or to define when an idea is successful.

    By drawing a line, we can decide when a project or business idea needs to be wound up – is that industry group working for you, that annual conference you attend still delivering leads, that product line still delivering profits?

    Killing an idea or project you been passionate about can be one of the toughest things to do in business, but if it’s time to move on then you need to cross that line.

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  • The five year business plan

    The five year business plan

    Recently I was talking to an old business partner about why our venture failed, we agreed we’d spent too long on trying to keep an idea alive way past the date it was clear it didn’t work.

    This formed the idea of the Five Year Business Plan. It’s not a detailed plan, just the broad cycle that the typical start business follows.

    Years one and two: The formative years
    The first two years are the most exciting, exhilarating, toughest and frustrating periods of running a business. This is when you test your assumptions, discover what works and ditch what doesn’t. You make mistakes, learn and build upon the lessons

    Not only is this the time your business develops, it’s also the time you learn about yourself and your business partners. Some of the lessons you’ll learn about debtors, staff, suppliers and customers will break your heart and make you tougher. You’ll also probably require cash reserves to see your way through much of the first two years as well.

    In many cases the assumptions are too wrong and cash demands too great. If the cashflow isn’t standing up, sales are too short of projections or the development is too slow, it’s often best to draw a line in the sand and move on before you invest too much of your life on an idea that doesn’t work.

    Consolidation: Years three and four
    Once through the formative stage, the third and fourth years are about consolidation. Having got your business running well, now is the time to be proving the model and making money.

    This period is where you start booking real profits, build goodwill and start laying the groundwork for your exit strategy.

    Year Five: The next steps
    In the fifth year, you’re looking at where the business will go next. Some entrepreneurs will look at cashing out to a buyer while others want to franchise out their systems or build the business into a world beater.

    With a four year track record and solid profits you’re in the position to seek buyers, investors, franchisees or lenders to execute the next stage of your business, and personal, growth.

    This five year plan is nominal as not every business will follow it. For instance a franchisee will probably short circuit the first two years as they are buying many of the systems and products a start up entrepreneur has to develop and that’s why a good franchise costs money.

    Also, the phases may vary depending on the industry, the state of the economy and just plain dumb luck but by understanding where the business is in the cycle, you can time the right moves for your business from when to grow and when to close it down.

    In many ways, starting a business is like being an early explorer like Christopher Columbus, Marco Polo or James Cook. You have a rough map with some ideas and assumptions on it but no real idea of what you’ll discover. That’s part of the challenge of being entrepreneur.

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  • Is Groupon the small business saviour?

    Is Groupon the small business saviour?

    Since Google’s rejected offer of $6 billion dollars to buy deal of the day website Groupon, there’s been a lot of discussion of just what Groupon and the hundreds of similar services mean to online commerce and small business.

    Groupon’s CEO, Andrew Mason, even went as far as to declare his organisation the “saviour of small business” on the Charlie Rose show.

    John Battelle, founder of The Industry Standard and co-founding editor of Wired, examines Groupon’s business model on his Searchblog and concludes it will be the small business platform for the mobile Internet just as Google are to the web and Yellow Pages were to the telephone.

    The problem with these ideas is scale. If every small business had the capacity and wanted to be on Groupon, the service simply couldn’t cope and the model breaks down.

    In my area there are, according to the Yellow Pages, 115 hairdressers in my district. Even if Groupon were able to geographically target me to my neighbourhood, they’d need a third of the year just to cover hair stylists which is tough luck for the lawn mowing services, plumbers, patisseries and other small businesses that may also want to advertise on Groupon.

    Which takes us to customer motivation, when I’m looking for a haircut, hedge clipping, cleared drain or chocolate gateaux I’m not particular driven by finding a bargain – if I do that’s great – but it’s not my motivation to buy.

    Groupon, and the other deal of the day sites, are driven by customers looking for discounts, and the key to business survival – particularly in retail – is not to depend on discounts to drive your business. So business models that rely on discount hungry customers, or cashflow desperate merchants, are always going to be limited.

    Groupon is a great business and it may well turn out to be worth $6 billion or even $36 billion. The barriers to entry are not so low as anyone who thinks executing an idea like this is “easy” doesn’t understand the work involved in building a local sales team like those of Groupon or Yellow Pages.

    It could well be that Google wanted to buy Groupon simply for that sales team. The failure of Google to properly execute on their terrific local search product has baffled me for some time and the only explanation I can put down to it is what Silicon Alley Insider’s Ron Burk attributes to Cash Cow Disease, where companies like Google and Microsoft find themselves paralysed by the rivers of cash flowing into their businesses.

    Deal of the day sites have an important role to play for businesses looking at demand management or clearing inventory and Groupon is a good business just like Clipper Magazine or Shop-A-Dockets, but to claim they are going to be the next great revolution for small business is giving too much importance to these channels.

    There’s no doubt though that small businesses will be the big winner when we get local search on the web right. When we get it right we’ll probably see the hyperlocalisation model for the media start to take off as well. So it could save two industries.

    Groupon though is not the small business messiah we’re looking for.

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