Normally I like to reserve the shout out to bring in the 80/20 rule for the end of the year at a minimum and every quarter at a maximum. But I think it may be time to seriously pull out the rule right now on your services.
Most businesses that are savvy enough to use the 80/20 rule apply it as they should to clients, marketing campaigns, employees, contractors, vendors and the like. But often overlooked is the application to the types of services and/or products your business is offering.
In a previous post I talked about niche-ing your business tightly right now as being a great way to shield yourself from the bad going on in the economy and allow you to build hero status to a select group or 2. This will absolutely help keep a handle on your resources by squeezing your client offerings a bit but it doesn't do the whole trick.
The next step is to look at the services and products being offered to your tight set of niches that you are now working within. What you're looking for is that 20% of products and services that's driving your revenue (ie deriving 80% of the sales). Sometimes it's more like 90-10 or 75-25 but you get the point I'm sure. If you are having trouble seeing the forest from the trees on this one, get help from someone on the outside. Seriously.
The bottom line is that your ship is as tight as it can be when you can concentrate on a very targeted audience and deliver to them what gives you and them the best bang for the buck. You look good, they feel good and both of you have a healthier company for it by not wasting any time, people or money.
This is what being a trusted advisor and bringing value to the table is all about. Nobody wants to go out of business. As a much needed provider of technology based services, you are an important part of keeping your clients and this economy alive.
Applying the 80/20 rule to everything in your business including what services and products you are going to provide is an intelligent move made by true entrepreneurs that understand running a company like a real business is not an option in regards to survival and prosperity for you and your clients.
To Your Business Success-
George Sierchio
The Consultant's Coach
Tuesday, February 24, 2009
Monday, February 16, 2009
More Proof:Tech Businesses Will Win & Those Run Like a Job Will Lose
I've been going nuts over the last 4 or so months trying to let technology business owners know that not only can they survive this tough economy, but actually grow.
Well it was more along the lines of spreading the word that survival and growth are based on running your company like a business and not as a glorified job. Painful but very true.
I'm going to continue on this important rant today by adding a little proof beyond my personal experience. If you read Inc Magazine you may have seen this. If you missed it, here it is again. This snippet was found on page 97 of the latest issue talking about outsourcing work and processes written by Darren Dahl:
".....
1. VETTING VENDORS Sometimes entrepreneurs underestimate the cost of researching vendors and vetting choices. The process can take weeks or even months and, depending on what is being outsourced, may require site visits and travel costs. And in times like these, entrepreneurs need to budget even more time to dig into each vendor's financial standing, says Paresh K. Shah, president of MindLeaf Technologies in Bedford, Massachusetts. Shah's company, which installs electronic records systems for hospitals, has outsourced several functions, including payroll and IT.
Two of the key questions Shah always makes sure to ask are "What is your current workload?" and "Are your clients paying on time?" He wants to hear that the company has a solid revenue stream and healthy cash flow. "As soon as you outsource part of your business, you are dependent on that vendor," he says. "You need to ask the kinds of questions that will allow you to sleep at night, knowing they won't go out of business the next day." Shah adds that it may be worth paying more to work with an established vendor rather than an upstart offering a lower price...."
Please note that the quotes in this part of the article come from a fellow technology business owner that outsources a lot of his IT functions. You can't get any better proof outside of me than that.
Read it a few times if you need to because I want you to really hear what Mr. Shah is saying. In a nutshell, he wants to deal with a real business and not an unstructured entity that may be there on Friday and gone on Monday. This has normally been the case but now no business looking to outsource critical functions can take a risk.
The end of the snippet also points out that a proven, value based vendor is the way to go and well worth the money versus the guy/gal cutting off their nose despite their face by slashing prices at a loss in an unnecessary price war. All this does is show prospective clients that you have no idea about how your business works because you are willing to lose money.
Running a business like that DOES NOT instill confidence in a client. It just tells them you won't be around long. This doesn't help anyone and I hope that's clear to you.
Structure Structure Structure
Although I hear the complaints all the time, no business is too small for this way of thinking. And now you have very little choice in the matter.
How the technical and operational pieces of your business tick and knowing exactly what's going on at any given moment is not a luxury of the big business. It's a necessity for any real business that wants to stay in business.
And I'd be happy to talk about it with you. Don't be left in the dust.
To Your Business Success-
George Sierchio
The Consultant's Coach
Well it was more along the lines of spreading the word that survival and growth are based on running your company like a business and not as a glorified job. Painful but very true.
I'm going to continue on this important rant today by adding a little proof beyond my personal experience. If you read Inc Magazine you may have seen this. If you missed it, here it is again. This snippet was found on page 97 of the latest issue talking about outsourcing work and processes written by Darren Dahl:
".....
1. VETTING VENDORS Sometimes entrepreneurs underestimate the cost of researching vendors and vetting choices. The process can take weeks or even months and, depending on what is being outsourced, may require site visits and travel costs. And in times like these, entrepreneurs need to budget even more time to dig into each vendor's financial standing, says Paresh K. Shah, president of MindLeaf Technologies in Bedford, Massachusetts. Shah's company, which installs electronic records systems for hospitals, has outsourced several functions, including payroll and IT.
Two of the key questions Shah always makes sure to ask are "What is your current workload?" and "Are your clients paying on time?" He wants to hear that the company has a solid revenue stream and healthy cash flow. "As soon as you outsource part of your business, you are dependent on that vendor," he says. "You need to ask the kinds of questions that will allow you to sleep at night, knowing they won't go out of business the next day." Shah adds that it may be worth paying more to work with an established vendor rather than an upstart offering a lower price...."
Please note that the quotes in this part of the article come from a fellow technology business owner that outsources a lot of his IT functions. You can't get any better proof outside of me than that.
Read it a few times if you need to because I want you to really hear what Mr. Shah is saying. In a nutshell, he wants to deal with a real business and not an unstructured entity that may be there on Friday and gone on Monday. This has normally been the case but now no business looking to outsource critical functions can take a risk.
The end of the snippet also points out that a proven, value based vendor is the way to go and well worth the money versus the guy/gal cutting off their nose despite their face by slashing prices at a loss in an unnecessary price war. All this does is show prospective clients that you have no idea about how your business works because you are willing to lose money.
Running a business like that DOES NOT instill confidence in a client. It just tells them you won't be around long. This doesn't help anyone and I hope that's clear to you.
Structure Structure Structure
Although I hear the complaints all the time, no business is too small for this way of thinking. And now you have very little choice in the matter.
How the technical and operational pieces of your business tick and knowing exactly what's going on at any given moment is not a luxury of the big business. It's a necessity for any real business that wants to stay in business.
And I'd be happy to talk about it with you. Don't be left in the dust.
To Your Business Success-
George Sierchio
The Consultant's Coach
Monday, February 2, 2009
Time to Niche Your Technology Business
Although picking a very targeted niche and sub-niching inside of that is a given for any business at any time, during a tough economy, it becomes even more important.
This may sound a bit counter intuitive as many businesses are scrambling to find as many clients as possible in panic mode, but it's an important concept that should not be over looked. Sticking to your guns on a focused target audience is a key to survival.
A buckshot approach will quickly devalue what your business brings to the table. This is exactly the opposite of what you want. Hunkering down into a specific target audience will get you to hero status in that niche.
It will also keep a tight grip on your offered products and services so you are not scattering your resources (ie people, time and money) and keep a reign on your marketing (which will now be utra-focused and more effective as you track everything you do) so you don't make the super big mistake of not marketing at all to save money.
As your niche gets serviced, more potential clients in that target niche will notice you making it easier to be the go to company with minimal marketing. And when the smoke clears on the economic conditions of today, ancillary markets related to your focused niche will take notice. Without even having to market to them, they will find you because of the fact that you did such a good job with your niche and you're still standing.
Have faith. This is how it actually works. It's never a good idea to be everything to everyone and a bad economy is the worst time to attempt this feat.
To Your Business Success-
George Sierchio
The Consultant's Coach
This may sound a bit counter intuitive as many businesses are scrambling to find as many clients as possible in panic mode, but it's an important concept that should not be over looked. Sticking to your guns on a focused target audience is a key to survival.
A buckshot approach will quickly devalue what your business brings to the table. This is exactly the opposite of what you want. Hunkering down into a specific target audience will get you to hero status in that niche.
It will also keep a tight grip on your offered products and services so you are not scattering your resources (ie people, time and money) and keep a reign on your marketing (which will now be utra-focused and more effective as you track everything you do) so you don't make the super big mistake of not marketing at all to save money.
As your niche gets serviced, more potential clients in that target niche will notice you making it easier to be the go to company with minimal marketing. And when the smoke clears on the economic conditions of today, ancillary markets related to your focused niche will take notice. Without even having to market to them, they will find you because of the fact that you did such a good job with your niche and you're still standing.
Have faith. This is how it actually works. It's never a good idea to be everything to everyone and a bad economy is the worst time to attempt this feat.
To Your Business Success-
George Sierchio
The Consultant's Coach
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