Archive for the ‘Strategies & Tactics’ Category

Why The Economy Isn’t Working Like It Used To

Monday, November 1st, 2010

We’ve all been through a very rough ride over the last two years. Some are surviving, holding on by their fingernails, others have failed, and still others have show some degree of growth. How is this possible? Being a student of life and an active observer, several things have become apparent and i’d like to share my observations.

First, there has been a fundamental change in the way we do things. It’s been developing for a number of years, but most of us aren’t fully aware of the significance. This has to do with change. In the old economy, our goal was to find a better way, prove it, refine it, apply it, and then make a gazillion widgets using these new methods or tools over and over until we made the next innovative extension of the idea. We’ve been doing just this for thousands of years, and it’s worked well because we’ve built our economies on the principle that knowledge is potential economic power. If guarded, and applied carefully, we can use this knowledge for our economic advantage.

Our patent system, professional trades, and even our higher education system are based on the controlled delivery of scarce knowledge. When knowledge was hard to find, and difficult to master, it was very easy to design an economy where knowledge could be exploited in this manner. We established an education system where the pure knowledge was hypothesized, fabricated, and proven. Later, often years later, this raw knowledge was commercialized and protected by the patent system so that technology originators could recover the development costs and profit in a protected environment for a certain number of years.

Today, all of that has changed. Along with the geometric growth of computer processor speed follows the same geometric growth of knowledge. Couple this blinding expansion of information with instant accessibility via search engines and we upset the economic model we’ve been using for thousands of years.

Things are moving too fast to achieve any real long term profit. In the printing industries it used to be that a company would buy a huge printing press (which we affectionately call “big iron.”) Their market would only be marginally established. Over a period of time, their huge investment in this big iron would pay off because of the opportunity it presented not only to the company, but to the marketplace. Simply having the capability was enough to attract new business. Often business would develop organically, independent of the actual marketing effort. Pricing was based on quality, service, and price. You could have any two of the three. Now, we need all three AND we’ve added smaller runs and faster turn times besides.

Today, that scenario is gone. Digital technologies are in continuous change. Products are obsolete as soon as they hit the market. Worse, the next generation digital is twice as fast at half the cost. It’s therefore an economic disadvantage to be the first one in. The only exception to this is if you have a fully developed marketing plan, with customers, and a backlog of orders in place. In this case you have a chance of success, but it is only fleeting at best.

The key to success in today’s information driven, expanding digital economy is to have a market that is expanding as fast as the technology. This has become an exceedingly illusive and difficult thing to find. In fact, it’s almost impossible to attain given the general state of the global economy today.

What will allow for success under these conditions requires a shift in our thinking. It’s clear we’ll need to do things differently. There are two things needed to enable this kind of growth. The first is to greatly develop and hone your skill of using Search to find and reach new customers. This is typically done through the use of keyword searches. Our ability to position our goods and services so that a big enough pool of potential customers can find you and buy your offerings will be essential.

In the old economy we did this by broadcasting who we were and how great we are. We would blast our messages out to the world in massive numbers, hoping enough potential customers would find us to sustain our business. That too has changed. Today, our customers are searching for solutions. To succeed, we must be seen as a relevant solution.

To accomplish this.

The second, and far more difficult challenge is to overcome what I call “legacy baggage.” These are the holdover thoughts, ideas, and practices of the old economy. This is tremendously difficult to achieve because our employees have been taught to learn once, use over and over. It is exactly what the old economy was built on. It no longer works. Today, employees must be retrained to be open minded and actively embrace change. It almost never happens that way. The reason is simple.

Most blue collar workers, and many white collar workers have abandoned continuous learning. School and learning threaten them. They don’t want to risk being exposed as less than competent. They don’t want t make a mistake or appear to be weak or dumb. In the process, there is a built-in resistance to anything new. The culture and environment of change is critical to your success. Yet, management rarely knows what they want to do, or how they’re actually going to accomplish it. They’re used to mandating by directive. That approach no longer works.

The resistance to change, or rather the resistance to the acceptance of new knowledge, is at the core of our ability to survive. This is why new start-ups and even offshore competition often get the new business. They don’t have the entrenched resistance to change. The one-two punch of “not invented here” and “we’ve never done it this way before” are the killers of innovation. The legacy baggage of the old economy are pulling us under. Look at your own organization and ask yourself honestly, it this isn’t the case for you. Recognizing the situation is the first step toward finding a solution.

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Going Beyond Ink on Cotton

Thursday, October 28th, 2010

In my last post, I talked about the t shirt as a commodity and how it is much more than that, it is really the media of personal expression. This is a pretty high concept and would have difficulty standing on it’s own. Long gone are the days of having shirts printed for a promotion or advertising and having them readily embraced by the market. If you’re a well known brand, or have an exceptionally hot topic, it may be possible to have a successful promotion with little effort, but this is usually not the case now.

Indeed, for decorated apparel to really work it needs a couple of things to happen. The first is to have graphics that are so striking that they will stop the average person on the street. The graphics don’t need to be complicated, but they do need to impress. The need for great graphic design is critical. Simple clip art is rarely enough anymore.

The image needs to be printed crisply and cleanly. Registration and image quality have to be right on. Mediocre execution of the imprint is a sure recipe for not getting noticed. This is what separates the really great decorators from the sea of average printers out there.

Secondly, you need a story behind the image. Remember that the person wearing your shirt is wearing it for a reason. They identify with the message that’s on the shirt. What is that message? To use t shirts as media you need to be communicating the story and CONNECTING the story with the person wearing the shirt. This means they have to have some connection to the experience behind the graphic.

This is really easy to accomplish with an event like a festival, walk-a-thon, 10K run, etc. Pick a theme for the event and create the graphics to accompany it. The better the graphics, the better the connection to the event and the experience of the event.

If you’re doing images for advertising, it’s a bit more complicated. It’s not about a blatant commercial image, it’s more about the professionalism of the company and what they stand for. This is your chance to dialog with the business and see if they have a compelling vision of who they are and what they bring to the marketplace through their goods and services. You can learn a lot about a company and your own business through this process.

This is only the beginning. Creating compelling graphics that stop the viewer on the street and start a conversation is an art in itself. Anything you do now will be a starting point on a journey to become expert in this craft. But the starting point will be more than your competition is doing and it will also begin to differentiate you from the commodity mass of printers out there.

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T Shirts as a Commodity

Tuesday, July 6th, 2010

It never ceases to amaze me what the general public thinks of printed t shirts. Actually, it’s quite instructional and there’s a lot to be learned from their reactions. There are some very stereotypical perceptions that don’t seem to change over time.

The first is that anybody can print t shirts and it just isn’t that hard. I think this comes from exposure to “silkscreen” in a high school or college art class. It can be a very basic process and, in fact, many people do print t shirts in this kind of environment. However, there’s a big step from the art class to the commercial space.

Second is the perception that t shirts are ink on cotton or ink on underwear. They’re cheap and you can get them cheap just about anywhere you look. This is an obvious observation and it’s supported by the fact that many starving t shirt printers will indeed discount their orders to very, very low prices.

Third, t shirts are a commodity. A commodity is a product or service that’s easily interchangeable with the competition and there’s no difference. Commodities are sold based on price. The only differentiator is the price. The winner is the vendor with the lowest price and availability of the commodity.

All of these perceptions are true on the surface, but they breakdown on close examination. Too many companies who produced printed apparel think of themselves as “t shirt printers.” If you’re one of them, you’re relegating yourself to the world of commoditization and sentencing yourself to a world of price based competition.

My point is, printed t shirts are anything BUT a commodity. When your customers come to you and ask “What’s your lowest price on. . . ” you set yourself up to become a victim of the commodity game. Rather, your position should be to find out more about what the customer actually wants. Their motivation is to get the best possible deal, NOT the lowest price.

Think about this for a minute. Study after study have shown when consumers are faced with buying decisions, they will most frequently pick the middle alternative, and not the highest or the lowest offering. Even if they come to you asking for the lowest price, they’re really seeking the lowest price for what their needs really are.

Here’s the catch. The average consumer rarely knows what they really want. The path out of the commoditization game is education. Knowing what questions to ask the customer to help them clarify their real needs starts the ball rolling in your direction. When you combine this with a wide range of options, the customer now has a vastly increased range of possible solutions. You move away from the single color imprint on a white t shirt and enter into an entirely different competitive landscape.

When you sit down and really think about what you deliver, it isn’t ink on cotton or ink on underwear. You’re delivering wearable media where the message connects your client to their community or customers. That connection is achieved through the graphics and the message. The ink on cotton aspect is only the vehicle to delivery that message. How you choose to deliver it, the printing options and the garment options are what allow you to move beyond the commodity aspect of the common perception.

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On Being an Entrepreneur

Sunday, June 13th, 2010

Over the years I’ve done several entrepreneurship programs for universities and colleges. I find it very interesting the academic perspective on entrepreneurship. Often they are missing key elements. It’s one thing to read case studies and talk about serial entrepreneurs, but it is quite another to actually go out and do it. Here are my top ten things I’ve noticed and experienced being a serial entrepreneur for almost 50 years (my first gig was selling donuts door-to-door in my neighborhood when I was 7.)

1) Entrepreneurs are more concerned with how the business works than working in the business. They understand the processes and find employees to carry them out.

2) There’s a big difference between being a business owner and being self empolyeed. Those who have worked for others and start a business based on what they love to do often get trapped in a well paying “job” they’ve created for themselves. Over the years I’ve even found myself trapped this way. The test of a business vs self employement is if you went away for a week or a month, would your business be bigger and still healthy when you came back. The second test is whether you have a driving need to get a paycheck every other week. The security of a paycheck isn’t what drives entrepreneurs.

3) Entrepreneurs aren’t concerned with what other people think about their plans. They may get 70% of the planning done according to textbook lessons, but the remaining 30% is sheer gut reaction that this is going to work.

4) They are ACTION oriented versus being overly concerned with defining every possible contingency. It’s very common for those with corporate, academic, or government experience to become trapped in paralysis by analysis. They lose the opportunity because they took too long to launch and someone else beat them to it.

5) Entrepeneurs aren’t afraid to fail. In fact, failing fast is one of the main objectives. They get most of it right and then fix what isn’t working as quickly as possible. They recognize that you can’t wait around to get everything right. Get it mostly right and pull the trigger. They know what the KPI (Key Performance Indicators) are for their business and what’s necessary for them to be successful. They have defined success in advance and what the indicators are for success.

6) They know that success isn’t an overnight, flash-in-the-pan. Sure it’s possible to hit one out of the park occasionally, but most businesses require steady improvement. They know what the milestones are and the time associated to get there is.

7) There are no 8-5 hours. Entrepreneurs are focused and all in. There is an adrenaline rush with working 16 - 18 hr days during start-up and growth. It becomes much more manageable when the initial rollout has taken place. This is alot like a Product Launch, but on a much grander scale. This is what drives the serial entrepreneur, the excitement and rush of the rollout. Hard work and long hours define the entrepreneur.

8) They recognize that the success of the venture depends on having people smarter than themselves running the key elements of the team. They concentrate on orchestration and coaching while they keep an eye on meeting the key objectives.

9) They recognize there are going to be set-backs and disappointments along the way, but it doesn’t matter. It’s part of the process. They also know what will be the deal killers and avoid those at all costs.

10) Most of all, they are persistent and tenacious. Perseverance and tenacity combined with gut instinct will win out almost every time. Even well funded, more experienced competitors will lose out when dealing with pit bull determination.

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Launching Your Clothing Line

Tuesday, April 20th, 2010

Lately we’ve been doing a lot of shirts for boutique clothing lines. These are usually designers who’ve come up with a few clever t-shirt designs and want to market them. The questions are almost all the same and I’m surprised no one has really set out to provide meaningful answers. So this month I thought I would share some observations and answers to a couple of the more common questions.

The most basic one is: Where should I market my shirts?

I don’t mean to be obvious here, but the root of the answer is, to outlets that are thinking like you. Where do you shop? Where would you go to buy the designs you’ve just done? Start locally and work your way up. This is important for two really good reasons.

The first is that almost all the businesses or individuals that come in wanting to get shirts printed lack seed capital. This is the money you need to actually print the shirts to fill orders. Start with a sample run first. Get something physical in your hands. Buyers want to see, touch, and feel the merchandise. Your first objective is to get some market reaction. If you can’t afford to get shirts screen printed, have the samples done digitally (direct to garment.) This is a good idea anyway so you can see what DTG looks like compared to screen print.

If you find there’s a positive reception to your work, expand within your region. This would be a 50 mile radius of where you’re located, or the nearest larger city. I’m always careful about recommending rapid expansion. With too little capital, I’ve seen too many promising companies literally burn up trying to fund their growth. Take it a step at a time. Make sure you get paid right away for your product. Running out of cash is the single biggest reason new companies don’t make it.

2. Should I exhibit in tradeshows to get bigger exposure?

Beware of large tradeshows. I’ve seen this happen over and over. Young, inexperienced, innovative companies bring fresh ideas to the market. They have no way to capitalize on potential success if it really hits. Calculate in advance how much business you can handle. It’s one thing to get orders for 1,000 shirts. What would happen if you got orders for 10,000? How much business can you afford to book? If you can’t answer that, you need accounting help to get the answer.

The most common situation I see at tradeshows is getting ripped off by much bigger companies that already have deep distribution and lots of financing. Make no mistake, you are being watched. If there’s lots of buzz about your graphics and you’re actually writing orders, you run the risk of a very quick knockoff of your concepts.

While they may not copy your work exactly, the imitations will capture the look and flavor of your offerings.

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Using the SMART System for Setting Realistic Goals

Monday, March 15th, 2010

I recently came across an excellent discussion on goal setting. The process is to set SMART goals —

Specific, Measurable, Attainable, Relevant, and Time-based.

Specific means each goal is precise in its definition. An example would be be increase monthly revenue by $10,000 and gross margins by 3%. A general goal like “improve cash flow” is not specific enough. When you are precise, it is much easier to determine exactly what steps are necessary to achieve the outcome.

Measurable - I call this “As evidenced by.” I want to know exactly how I will be measuring the improvements I’m shooting for. If you can’t define how to measure your progress, you won’t be able to achieve the goal.

Attainable is exactly what it means, you can reasonably achieve what you set out to do. One of the biggest problems I see with goal setting is putting objectives out that can’t reasonably be met. Here is an example. You best month in business was a big stretch for everyone. There was a bunch of overtime and some mistakes, but not too bad. You monthly sales were roughly twice what an average month is.

Now. using this information, you set a goal where the monthly volume is 10%- 15% higher than your very best month. This could very well be an unrealistic goal for many different reasons. The biggest of which is personnel. Your trained employees were stretched to the max and were beginning to make mistakes due to the shear volume and from being tired. This is an example of unsustainable business volume. In order to keep it going, and grow it, you would need more new people.

The introduction of new people will actually slow your production down before you can get it to ramp up. Then there is the impact on your cash flow. Increasing business too quickly is one of the main ways you can crash a company. You’ll run out of working capital before you run out of work. In other words, you’ll burn up before you collect the receivables you’re due.

A more realistic goal and attainable goal would be to use the trailing 13 month average as the basis for improvement. To get this number, you add up 13 months and divide by 13. This approach takes seasonality out of the equation as well as any really good or really bad months. Set a goal of increasing this number by 15% - 25% over the next year. To track your progress, add each new month’s sales to the previous 12 months sales and divide by 13. That will show you how your average is tracking on a volume adjusted basis.

Relevant - This is harder to dial in on. I see companies setting goals all the time that are not relevant. This means, attaining the goal won’t necessarily improve the business. A good example of a suspect relevant goal would be to purchase a specific piece of new equipment, like an auto press. This goal in and of itself is not relevant until you determine all the other changes that will take place when you have this new capacity. You will need more screens, more people, bigger orders, perhaps more space, and certainly more working capital when you invest in automation. Young companies don’t recognized this and are often shocked at the impact of achieving their goal. Often this shocking revelation is not a good thing.

An example of a relevant goal would be to focus on increasing gross margin and cash flow before increasing production capacity. If you do set a goal for purchasing new equipment, be sure to look at all the things that will change when you have this new capability.

Time-Based Give it a hard completion date. Without a deadline, it simply won’t happen. Here is how I set time based goals. I set my goal objective. I then break it down into specific steps, stages, or events to get there. I put the time I needed to accomplish each step next to the step. I add up all the times and that will give me the absolute bare bones minimum to achieve it.

I look at that time, and then I double it. So if the total process is going to take 4.5 months, I double it to 9 months. I then look at the time I have assigned for each step and I double those times as well. Each step now becomes a milestone I can chart on my calendar. I determine my start day and then add each milestone deadline to the calendar based on the amount of time it takes to accomplish it.

I use an electronic calendar that allows me to filter events so I can have a tone of things going on, but each view is unique to the kinds of activities I’m working on. I find I get a lot more done this way and my colleagues and associates are always commenting on how much I can achieve in the time I have.

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Beginning the Planning Process - FOCUS

Wednesday, January 13th, 2010

Planning and goal setting begins with focus. Unless you have a laser guided vision of where you want to end up, you’ll never get there. It’s not all that important to know the details of how you’re going to get there. It is important to know where you’re going.

When I talk about focus, I’m concerned with the areas that are most important to us. This includes our customers, markets, distribution channels, technology, and people. If you try and plan without considering all these related areas, you’re bound to end up frustrated with a set of poor results. This leads me to one of the biggest goalsetting mistakes common to all most all of us.

It’s common to over estimate our goals. Be bold, but be realistic. You need some kind of reference point and a basis for making your assumptions. You can’t just say, “we’re gong to be a $20 million company by the end of 2010 when last year’s sales were only $500,000 and you have 2 employees. There are exceptions to this, but in general, being realistic is a big part.

Where I see the big focus challenge (myself included) is in being spread too thin over too many different areas. A good friend and mentor of mine recently told me, in his “down home” style, “Remember who brung ya to the dance.” By this he was telling me to focus on the customers, markets, etc that have made our success in the past possible. It’s far easier to expand business with someone you’re already doing business with than to abandon them and go running for the next biggest and greatest thing.

While we’re on the subject of focus, my wise friend also counseled me to stop “swinging for the fences all the time.” He was advising me to spend more of my time on work we would be certain of attaining and not spend too much time on speculative monster accounts. It’s ok to have some of that in your mix, but the stability of your company and your sales lies in diversification and with a customer base that appreciates what you do for them on a daily basis.

It’s much easier to please small to medium accounts than it is to cater to the whims of that big elephant. If you displease them or fail to deliver, you’re in big trouble when they leave. You aren’t nearly as exposed with more smaller accounts.

Look closely at all the key areas necessary to grow your business. Really drill down and look at how much capacity for growth you really have. This means knowing exactly who is going to be doing the work or how you’re going to pay for it. All of us are working thin after the last year. If you really want to grow, but can’t support that growth, there’s no point in driving forward.

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Great Ideas on Using LinkedIn

Monday, January 4th, 2010

I’m a huge believer in LinkedIn and other social media sites. They are, without a doubt, the next generation way to build our businesses. Today, I wanted to offer a guest blog post by Jim Gibson, publisher of Online Media Today. Jim’s blog post has created a great discussion in the Inbound Marketing Group on LinkedIn and I wanted to share it with you today. If you’re new to LinkedIn or want to get more out of using it, here are some great ideas. Enjoy.

By Jim Gibson - Publishing Partner, Online Media Today

Ten Tips When Using LinkedIn!

LinkedIn Tip #1: Have a Plan

Decide what you want to accomplish before you start. LinkedIn, like other business oriented social networking sites, offer a number of ways to generate the results you are after. Want to present your company? Looking for a job? Network with like-minded professionals? Need an answer? Want to establish yourself as a thought leader in your space? Each of these approaches present excellent opportunities to leverage professional online networks but make sure your plan is solid before you start.

LinkedIn Tip #2: Make Your Profile Easy to Digest

Tell your story but keep it brief. Short, pithy, sentences are more likely to be read than lengthy paragraphs. It’s like an elevator pitch (explained in less than 1 minute). Use bullet points. Readers often scan content and bullets help to highlight your successes. Provide details of your work history and make sure to highlight your special skills. Above all, make sure to check for proper grammar. Make sure to use important keywords when describing your professional experiences as these can help others find you more easily. And before you post your profile, read it aloud to yourself to hear how it sounds or better yet, ask a colleague to read it and tell you what they think.

LinkedIn Tip #3 – Your Profile Photo

You must have a picture! But make sure it’s a good one and shows you in a professional light. This is not the time to be too cutesy. Don’t upload the picture you took at your last toga party. For women, this is not the time to strike that sexy pose. Choose a professional and friendly picture that demonstrates your real personality yet shows you are here for business.

LinkedIn Tip #4: Give (and ask for) Recommendations
If you want recommendations on your profile, be prepared to ask for them. Look at those you are connected to and offer recommendations to those who deserve them. Make them short and to the point and be sure to include specific accomplishments – don’t be too general. The more genuine the recommendation you give, the more likely it is to be returned. Rule of thumb: if someone gives you a recommendation, thank them first then return the favor!

LinkedIn Tip #5: Join Groups

Be a contributor. Generate posts and respond to discussions. Group interactions provide you and your company great exposure. Check out other member profiles and follow their discussions. This is a great way to identify valuable contacts and network in meaningful ways.

LinkedIn Tip #6: Be the first to comment!

Clearly, it’s important to engage and interact with your audience. This helps to establish you as a valued contributor and can lead to more meaningful connections. But what most people do is look for posts that already have lots of comments and, only then, do they add theirs to the mix. The common thought, naturally being, posting where there are lots of people = lots more visibility.

Don’t get me wrong - that’s cool. But the important thing here is to support the post originator and there’s nothing cooler than to give that first (note: quality) acknowledgement. People post on social sites in order to get feedback and hate it when a post goes virtually unnoticed. The first one to post is a welcome sight (Ahhh.. someone noticed!) and helps to foster a new relationship with the person who started the discussion in the first place! This is the true meaning of social networking - one on one. But, by building relationships intelligently, one on ones ultimately lead to one on many.

Don’t be afraid to be the first to post a comment. A good post originator will thank you, appreciate you and most of all notice you. It’s done this way in real world social settings so why not acknowledge its effectiveness in the virtual world as well.

LinkedIn Tip #7: Connect with Thought LeadersFind those considered leaders in your industry. Search by company to find the people who are true influencers and follow what they are doing. Research who your industry leaders are through existing trade publications and find them on LinkedIn. If they are and we share a contact I know well, reach out through the contact for an introduction.

LinkedIn Tip #8 – Selecting Groups

Search groups using industry keywords and related topics
Look at the groups of industry leaders, subject matter experts and top executives
Look at groups your connections are members of
Use pertinent Q&A category and ask what groups people belong to
Pose the question in your current groups: “What other groups do you find useful?”

LinkedIn Tip #9 – Use the Search Feature

Using the “Search function on your LinkedIn home page (upper right), you can “search” on People, Jobs, Companies, Answers, Inbox and Groups.

If you move to the right of the search box and click on “Advanced,” you can search on keywords, name, company (current and past), geographic location, industry, job title (current and past), school, groups, by language, by the interest of those being searched, when they joined LinkedIn, those in or out of your network, and by relevance – and any combination of the above.

Find the companies you want to do business with and the people you need to meet at those companies. With over 50,000,000 business professionals registered, your search results can pay big dividends

LinkedIn Tip #10: Use Applications

LinkedIn has teamed up with some of the Internet’s premier companies to offer registered users access to new applications that enable you to collaborate on projects, get key insights, and present your work to your audience in interactive ways. Have a Power Point presentation you want to share? Install the free SlideShare app and instantly share your presentation to a wider audience. Need to brainstorm with your team on a new idea? Load Huddle Workspaces on your profile and instantly collaborate with your colleagues. There are many apps to choose from and several are showcased at: http://learn.linkedin.com/apps/.

Planning for 2010 and Beyond

Saturday, January 2nd, 2010

The first week of the New Year is always a special time for me. it’s when I sit down and try to objectively look at what happened in the previous year and plan for the coming year. For almost everyone 2009 was a train wreck of a year. The wheels came off and most companies are lucky to still be around. So, looking back for me was mostly painful. The only thing we can do is suck it up and keep moving forward. There aren’t going to be any quick fixes and fast turnarounds.

Planning is going to be the theme for January. Over the next month I’ll be blogging about how to set the course for your 2010 Business Plan so you can be as profitable and productive as possible. Here are some beginning thoughts to help you get started with your planning.

1) Focus, focus, focus. When I look back on ‘09, the single biggest thing I see was the disorganized, random, chaos of reaction. When things don’t go as planned, we react. Too often that reaction is unfocused and relevant to the event at hand. Our actions don’t fit into a bigger plan, so we aren’t nearly as efficient as we’d like to be. It is more or less like sticking your finger in the dike to stop the leak. It may fix the immediate, but it does nothing to address the bigger problem of why the dam is leaking in the first place.

Focus means selecting a course of action and sticking with it. You don’t have to get it all right, but you do need to concentrate on the desired outcome and fix on that. We can make minor corrections along the way, but don’t be tempted to make radical changes in midcourse.

2) Know what the outcome of your efforts is supposed to look like. Are you trying to add new customers? Increase sales? Increase frequency of sales? All of the above? Clearly define what your expected outcome is so you’ll know if you are on track or off course. Have Plan B, C, and D in place if you’re ahead of schedule, behind schedule, or on schedule. With alternatives in place, and a clear idea of the result you’re looking for, it makes it much easier to stay on target for your goals. This will help you avoid wholesale course direction changes that can stall your momentum and dilute your efforts. And it can help you from wasting time on nonproductive diversions.

3) Understand the difference between planning and action. The plan is the framework to achieve your results. It is strategic and should result in increased stability and soundness. The tactics or actions are how you’re going to get there. We tend to focus on tactics at the expense of strategy.

4) From Steven Covey’s Seven Habits of Highly Effective Leaders, “Begin with the End in Mind.” Define your ending point or year end goal for 2010 and begin piecing the parts together.

Over the next month, I’ll be concentrating on the planning process so by Feburary 1st, you’ll have a workable plan in place for you.

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Who Should You Be Doing Business With?

Monday, December 7th, 2009

Throughout the year I look at who we’ve been doing business with and how their orders compare. We use the traditional approach (Paretto 80/20) that shows us a relatively small number of customers account for the majority of our orders and profit. When I apply this approach it’s easy to see who is taking up most of our time and to compare if they are generating sufficient order size to make it worth our while. About a year ago we did this and were shocked to find one customer accounted for 66% of our press time, but they only accounted for 18% of our revenue. What does this mean?

When something this extreme becomes evident, I have to ask myself, “how did I allow this to happen?” The answer is not always an easy one. In this case, we were doing such a good job, the client kept feeding us more and more of their work. We were not their only vendor, but we were one of the only ones that could do their most demanding work. Over a period of about a year, we saw a shift in the mix of orders coming to us. They became more and more technical, while at the same time the order size was getting smaller and smaller. We found ourselves in the position of spending two to three times the production run time in set-up (registration and color adjustment.) So, for every hour of running time, we would have two to three hours of set-up. That was horrible to be sure, but it got worse.

Since the customer was sending us more and more work, they demanded greater price concessions due the volume of their orders. We quickly found ourselves in a position of having to agree to lower overall prices while their order size diminished (supposedly due to the economy) and more difficult work. There was no way we could recover the set up time over the run length and before we knew it, we were in big trouble. This was only compounded when they started to stretch out their payments to us, further impacting our ability to run the business. Overall, a very bad situation.

There are many lessons here. Number one, don’t get caught being asleep at the wheel. This is a perfect example of being so busy being busy that you don’t realize what’s gong on until it is too late. We all want to be responsive to our customers, but business is a two way street. If you can’t be profitable, AND get paid within a reasonable time, you mind as well not do the work.

Second, know what your ideal customer profile is and try to exceed it. When order sizes shrink, so must the set-up and changeover time. You need to know what the smallest size order you can do will be. Otherwise, you’ll find yourself being suckered into doing runs of 12 pieces with a 7 color front and an 8 color back. Suckered may not be the right word, more like coerced. There are a million justifications for having to do really short runs, but we all have to stand firm, or have a policy in place to account for these kinds of situations.

Third, compare the profile of each of your current customers with that of your ideal customer. If you don’t have enough ideal clients, you need a plan to fill the pipeline with new prospects so you can mirgrate away from the time consuming, profit robbing, customers you currently have.

This last year has been generally awful for most printers I talk with. While the economy seems to be getting better, it is still fragile at best. At the very least, we are coming into the slow time of the year and we all need to be especially mindful of these kinds of situations so we don’t accidently find ourselves in big trouble even though we seem to be busy.

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