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I created this lens to share experience of what actually works in business and to explore the chasm between the win-win and predatory schools of business.
I'd like to discuss the stages by which companies grow - where the inflection points are - where organic growth works and where you have to back off and do something different - the issue of stuckness if you will.
Getting past these may mean extra money - it will mean knowing what you have to measure to keep your business on track, how to identify what people want to buy and how to develop a story that resonates both inside and outside the business.
Great companies move excellent products and services through robust processes run by people who love to do that type of work.
I want to explore how we get there from where we currently are. That's my agenda. I think we need to learn how to this stuff better -I research and develop content programmes for SMEs or those who want to sell to them. So naturally I have some strong opinions about these issues.
But we live in a networked world - where new ideas come in faster than one person can keep up with it - so I really want to know what you think. .
My own views can be summarised as follows
1) We increasingly live in a world where knowing how to do business is a key survival skill - so we'd better get good at it.
2) We need to work from the heart - people buy integrity, delivery and being easy to work with.
3) We need to work from the head - it's pointless being great at what you do if the numbers don't stack up and you can't return what you and your investors need.
4) So the world needs us to be integrated beings who build holistic businesses that will network to transform the world we live in.
5) Dudley Lynch divided the world of business into Carps (victims) Sharks (aggressors) and Dolphins (exploratory collaborators). He states that if the dolphins start to collaborate its all over for the sharks.
With your help I want to test whether this is true.
A simple theory of business growth
Its all about managing relationships
I believe that business occurs in pre-defined stages. Growth occurs rapidly and organically between them but when a company hits the next barrier, it has to start behaving differently before it can move on.We're bounded by our animal origins and hunter gatherer ancestry. This affects how we behave in business. Left to themselves, businesses seem to cluster at key preferred sizes due to natural interpersonal dynamics.
Most small businesses only employ the founder - these individuals are often loners who don't really want to work with others.
The next stage is for 2 people to work together and this can be a very productive association as shown by the many husband and wife companies.
Then there's a gap. 3 and 4 people are unstable numbers - with 3. 1 person gets left out - with 4 you get 2 little gangs of 2 and conflict is endemic in the structure.
Then we reach the sweet spot - the traditional 5-12 person hunter gatherer band. It's easy to lead a team of this size on your own - everyone knows what they should be doing & you can keep most of the important stuff in your head. But you need a basic structure to create a base-load income stream.
Getting past 10 employees is a real problem. In the UK only 1600 companies a year go from employing less than 10 to more than 10. Barclays Bank tells us that thinking time is a real problem for companies with 10 - 20 people.
Why is this so hard? Mainly because of the time taken in managing relationships. Every new person that joins brings in another layer of relationships that need managing. By the time you get to 14 people it uses all the strategic planning time.
Getting past this means adopting something like Mike Southon's 4 cornerstones model. This lets you recrystallise at about 20 people and gives the management to take the business up to the 70 person, £5-10 million mark when it can be sold.
To go past 70 it's necessary put in a layer of middle management - a real change of behaviour.
The final barrier seems to occur at around 150 when the leader runs out of head space to directly model the relationships between all the other people in the business. This is called the Dunbar number - after the work of Professor Robin Dunbar. It's no accident that the military - who have the most experience in practice - use the Company of around 120 men as their key tactical unit.
To break through these barriers you have to change the way you behave - and that's hard.
Free e-book on business growth
Covers business development, choosing partners, marketing development and IT infrastructure
Originally developed for transport companies in eastern europe as part of an EU Leonardo project
You can download it at this link
- e-tranee workbook
- The section on Business Development is pretty innovative - it takes a balanced scorecard / knowledge management approach to the problem of measuring the growth of value in a small business - an area that remains depressingly unexplored
Getting more sales - the small business number one concern
How do you get that steady flow of warm enquiries?
- 1 Man Brand
- 1Man Brand is a complete distance learning programme that tells you all you need to know as a small business about Sales and Marketing.
It's written from the point of view of the small business owner and tells you all that I've learnt in the last 25 years about strategy, PR, Market Research, Workshops and exhibitions, Direct Mail and CRM, Face to Face selling and an overview of how to make blogging and pay per click work for you.
You get 6 hours of powerpoint + voice over presentation 200 pages of supporting material including a 20 page planning document and the 100 page "fast-track to e-commerce" - all for £77 GBP. - Free 1 Man Brand evaluation movie
- Overview of 1 Man Brand illustrating the unique, easily controllable techniques it uses for showing you how to go about improving your marketing
- Buy Market On-Line e-book
- This e-book is the online marketing bit of 1Man Brand. Many of our clients said that powerpoint + audio was fine but they'd prefer and e-book - so here it is - 95 pages of strategy, how to use google ad-words intelligently and how to use blogs, PR and squidoo to drive traffic to your site. Only £17.65 GBP.
Common Small Business Crises
Reasons we get stuck
- When the founder can no longer sell enough himself
- When more people need to be taken on
- Changing premises - (remote /flexible working can postpone this)
- When the product range needs re-inventing
- When the business processes and systems need upgrading
- When the business needs to start trading with larger partners
How to develop new products
How to find our what your customers want so that you work with them to create new products. Why this is so much more effective than trying to sell your existing stuff to new customers
The world of business doesn't stand still - the market is always changing and market opportunities only have a certain shelf life.Companies who want to develop have to choose how to do it. The options are shown in the matrix diagram. You can either do more of the same harder, sell new stuff to your existing customers or find new customers for your existing products.
What do people do in practice? 3 times as many companies try to find new markets for their existing products as look at developing new products for their existing customers. The key issue is how much it costs to acquire a customer. Research shows it costs 7-10 times as much to create a new customer as to sell to an existing one.
So it's often cheaper and better to find or develop new products for your existing customer base than to conquer new markets.
In essence new product development is a 4 stage process
1. Talk to the customers
2. Find out what they want
3. Work out how to do it without going bust
4. Do it
The actual product that the customer buys is often a joint creation between someone knowledgeable in their team and someone on ours. All we have to do is to make this more systematic. Start by a picking a small selection of your customers. Ring them up and say you want to improve the quality of your products and could you have a chat. You can do this on the phone but its better to go and see them.If you do it yourself as the business owner they will nearly always see you.
Have a checklist of 6 areas and go and talk to them. See what comes up; are there any common themes. Afterwards brainstorm around the ideas and filter them according to
1 How easy is it for you to do (and how extensible is the product idea)
2 How big is the potential market
3 How well it fits with your existing market postioning and branding.
Ring a sample of your customer base. If you have 50 customers ring them all up - if you have thousands then talk to a sample. Pick 2 - develop one and buy in one to kick start the process.
Focus on the customer's needs - particularly how they use your product - you may get some surprises. Then talk about how you could develop the product or service - new materials, new processes, and new features to deliver some real benefit to the customer.
If you make the most of your existing customer relationships to clarify what your customers expect or want from you, you may save your self a fortune prospecting in ne
Useful Links
to help you
- 1 Man Brand
- Sales and Marketing Toolkit for the owner manager. Contains what I've learned over 25 years. Contains some up to the minute strategy plus a series of how to do modules covering PR, direct mail and copywriting, exhibitions and workshops and how to use new media to promote your business. Price £77 GBP
- Business Development Module
- Articulate presentation (powerpoint + voice over as flash movie) of the Business Development module. Currently FOC
- How to do Business Club on Ecademy
- Club set up on www.ecademy.com where people can discuss business topics
- Planet Ocean's Unfair Advantage
- All you need to know about playing the search-engine game. Updated every month for only $97 for a 6 month subscription
- Small Business Stats in the UK
- This link takes you to the UK's Office of National Statistics. It includes a full profile of the UK economy by size and industry sector - invaluable for a bit of initial market research
- Business Scene
- If you are in the UK this new site gives you information about business materials and events on a local basis. I am responsible for the Marketing Section
How to do Business
e-blogger version
A work in progress account of experiences in marketing or interesting stuff I come across
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The Wordpress Blog
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Ecademy Club
Discussions taking place on How to do Business Club on ecademy
Fetching RSS feed... please stand byWhat you need to know to run a business
12 books you really ought to read
The Tao of Leadership: Lao Tzu's Tao Te Ching Adapted for a New Age
One of the best books on leadership that I have read. Elegant and simple it goes through the Tao te Ching relating the different chapters to different aspects of leadership. Full of wisdom it advocates the role of silence, support and facilitation of the other's process as tools of leadership. A must for cat-herders.
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Amazon Price: $11.04 (as of 11/12/2009) 
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The Art of War: (Penguin Classics Deluxe Edition)
Know yourself, know your enemy, know the terrain and you're more likely to win if you don't. The original bottom-up strategist.
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Amazon Price: $10.55 (as of 11/12/2009)
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Inside the Tornado: Marketing Strategies from Silicon Valley's Cutting Edge
As markets change, the very skills that you've just perfected become your biggest liabilities, and if you can't put them aside to acquire new ones you're in for tough times. All industries which rely on technology must learn to thrive Inside the Tornado. Tornadoes mean that the winner takes all-so you need to work out how to become the Gorilla in your market niche.
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Amazon Price: $24.70 (as of 11/12/2009)
Temporarily out of stock. Order now and we'll deliver when available. We'll e-mail you with an estimated delivery date as soon as we have more information. Your credit card will not be charged until we ship the item.
Influence: Science and Practice (4th Edition)
Well researched scientific study of how individuals respond to about half a dozen emotional triggers. Important for anyone engaged in leadership and selling - or who needs to be able to resist!
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Amazon Price: $18.72 (as of 11/12/2009)
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Strategy of the Dolphin: Scoring a Win in a Chaotic World
Classic Business book of the 80s. Covers Brain Function, value systems and conflict resolution strategies in 1 easy to read book.
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The Fifth Discipline: Art and Practice of the Learning Organization (Century business)
The original definition of the ideas behind the concept of the learning organisation and what you have to do to make it happen
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Intellectual Capital: The New Wealth of Organizations
Good introduction to the issues of measuring intellectual capital
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Bigger Profits for the Smaller Firm
Excellent simple introduction to the basics of finance. The overview of key financial ratios is clear, concise and to the point - I always refer to it if in doubt
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The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It
By Michael Gerber
Another old workhorse. Work on the business not in the business and think of it as a franchise from day 1 - even if you're not going to go that route. START WITH THE EXIT STRATEGY
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Amazon Price: $11.10 (as of 11/12/2009)
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Unleashing the Idea Virus
Excellent review of how viral marketing works. How ideas spread and how to have your customers on your side instead of irritating them with conventional interruption marketing. Probably the reason this lens exists!
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The SPIN Selling Fieldbook
The SPIN Selling Fieldbook is a practical guide to Spin selling - a method widely used in corporate selling and included in every business-to-business sales manual
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Amazon Price: $15.71 (as of 11/12/2009)
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Protecting Your #1 Asset : Creating Fortunes from Your Ideas : An Intellectual Property Handbook (Rich Dad's Advisors)
No wimpy intellectual stuff here. This is Rich Dad's lawyer! A bit North American for us Brits but covers the basics well enough
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My thoughts on ecademy
Fetching RSS feed... please stand byby alanrae
Alan has run small companies employing up to 25 people for most of the last 25 years.
His main focus is on how small companies grow...
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