Entrepreneur Business Tips: Part One
Date Posted: 11/10/2009 | By: Maureen
Business Tips – Part One (Tips 1-7)
Label printing is a small piece of getting your product to market. We’re going to share a few business lessons and insights we’ve learned from ‘living it’ as business owners ourselves, working with 100’s of business owners like you, and being relentless students of business.
Tip #1 – Watch your cash!
I heard a great saying the other day: ‘revenues and vanity, profits are sanity’. I love it! I’ve watched a few businesses grow themselves out of business because they weren’t watching their cash flow and cash reserves. Be sure you know what your cash conversion cycle is (how long it takes from the time you spend a dollar until you make a dollar), what your average A/R days are, and what your bottom line margins are. Know where every penny in your business is earned and spent, and build a runway of cash for the tough times (2009, anyone?) that every business goes through.
Tip #2 – Dig what you do.
We are absolute label printing and business geeks around here at Leapin’ Lizard Labels. Really, it’s almost pathetic trying to take us out in public because we’re always pointing out custom labels and stickers to the people we’re with. We really, really love what we do. When you love what you do, tough times aren’t that big a deal; you know you’ll get through. You’re looking for ways to innovate for your customers. The majority of your days are fun because you’re getting to spend time doing something that’s interesting and challenging. Your customers can sense your passion for your work, and for their success.
Label printing offers all kinds of fantastic opportunities for us, because we dig what we do. It’s not for everyone. In fact, we had a customer (you know who you are, ; ) ) just this week tell us just the thought of having to print her own labels made her want to do physical harm to a piece of equipment in her business. So, find your passion, follow your folly, dig what you do!
Tip #3 – Use the Rule of Five.
Running a business is a schizophrenic proposition. One of the most important things you can do is protect your time and work on the most important things first. Jack Canfield and others recommend using the Rule of Five. Each morning, list the five most critical things you need to accomplish that day. You may have interruptions throughout the day, and get sidetracked, but your day is not complete until you have accomplished the five things you listed as your top ‘to do’s’ for the day.
Label printing is no exception. We here at LLL use a business top 5, and each have a personal top 5 for each day. We also have a top 5 for the week, for the month, for the quarter and for the year so we stay on top of where we are headed strategically and are working on the most important things that will get us there. The results really are astounding when you use this system, though it does take discipline to get rolling. As Jim Rohn says, “It’s easy to do, and it’s easy not to do.” We’re happy to share more if you’re interested.
Tip #4 – Focus on a niche market.
Are you trying to make the whole world happy with your product or service, or are you focused in on a small, niche part of the market that you really understand and can service exceptionally well? Start by asking yourself what problem your product/service solves or what need it meets. Then ask who, specifically, has those problems/needs. If you’ve been around awhile, look back at who has been spending money on your offering. What do they have in common? Are they a certain age or income? Are they located in a certain region? Do they all belong to the same associati0n? Are they all proficient in a certain software?
Really slice and dice to find out who your market is now. There is so much free data out there that validating potential market size is easier than ever. Your local business librarian has morphed into a database wizard while you weren’t paying attention, so they’re a great first step.
Label Printing markets are really diverse, so don’t think I’m suggesting you do anything we have not done here at LLL. We had to decide if we were going to focus on the custom label printing market, short or long run, digital or flexo etc etc. Because we’re focused on a niche in the marketplace we make decision about equipment, pricing, customer service etc to meet the needs of our market. Don’t try to be all things to all people; it waters down your message and your ability to deliver the results your target market is looking for.
Tip #5 – Express Your Gratitude.
Expressing gratitude to clients, employees, vendors & suppliers is one of the most powerful and under-used business practices around. Every day, as business owners we have the opportunity to thank our customers for doing business with us, thank our employees for a good job, thank our vendors and suppliers for the relationship we have with them. A simple, “Thanks I appreciate ‘x’ about you/working with you” goes a long way. Make it an ongoing practice to express your gratitude to the people around your business. Everybody wins!
Label printing allows us to work with really fantastic customers like you. You all (or y’all, as Todd would say) have a passion for your product and your labels, and we are grateful every day for the relationship we have with you. We know you have choices in the marketplace; thanks for choosing to work with the Lizard crowd, and for being so fun to work with!
Tip #6 – Know Where You’re Headed.
I fondly call this time of year ‘planning season’ as everyone prepares (or should be preparing) their strategic and operational plans for the coming year and beyond. I’m a planning geek, and help 20+ businesses a year with their strategy and I love every minute of it. I find quite a few businesses are focused on operational plans (which you need!) but not strategic direction. Key questions to be considered in your plans:
*Who are your clients now / who do you want them to be in 3 years? *What are your products and services now / in 3 years? *What geographic markets are you in now / in 3 years? *What are your customers continually asking you for that you don’t now provide? *What products/services are the most profitable? *What kind of talent will you need to grow your business?
I could go on and on, but answering those questions is a good start to thinking strategically about your business so you can plan strategically for the upcoming years. I highly recommend the Gazelle’s One Page Strategic Plan as a planning tool, which can be found at www.Gazelles.com. It’s free, easy to use, and very high impact when used as a leadership and management tool instead of as a form to be filled in.
Label printing is a great example of an industry where some businesses planned operationally, but didn’t think strategically about where their clients, and subsequently the industry, were headed. I just learned of another print company that went out of business in part because they didn’t pause and think about what their customers were asking for and what services they needed to provide to stay competetive. The list of those going by the wayside is getting really long, which is a sad testament to an industry that has been slow to change. It’s critical to stop, pause, think and plan for what’s coming next and where you want to take your business!
Tip #7 – Know Your Numbers.
In every business there are a few key numbers that will quickly tell you how healthy (or unhealthy!) your business is. CPA-types like to call these Key Performance Indicators, or KPI’s. For each company the KPI’s will be unique, though you can see trends by industry. For example, a KPI in the construction industry is backlog, while in the manufacturing industry it’s inventory turns. Knowing what your KPI’s are is the 1st step. Measuring and tracking the wrong thing can be just as detrimental as not tracking anything at all. Ask yourself: what made you successful last year? If I had 30 seconds cell phone battery left and wouldn’t be able to talk to anyone at the company for 30 days, what would I want to know? Your answers to both those questions start to uncover your KPI’s.
Key point- your KPI’s are NOT your financials! Those are ‘rear view’ indicators- they’ve already happened. You’re trying to get to windshield indicators- those that are coming your way and that you can make moves to adjust the outcomes. So, you’re not looking at revenues (rear view), but you might be looking at number or sales presentations or proposals sent (windshield.)
Label printing KPI’s are things like number of requests for samples and customer satisfaction scores. Knowing those numbers gives us peace of mind knowing our business is healthy, or fair warning that we need to make some changes. Once you determine your KPI’s you can start tracking trends and proactively managing your business.
Business Tip #8 next time!