Category Archives: Business Strategy

Long range, big picture, macro

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10 Strategies for Surviving a Bear Market

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Step right up folks. Welcome to the bear market. Wasn’t this the party you were looking for? Probably not. But the bear market bus has left the station and you have no choice but to hang on for the ride. Get used to it—bear markets are stubborn. The bear market known as the Great Depression technically lasted for 3 years (1929-1932). The Dot.com Bubble bear market lasted 2 years (2000-2002).

However, the negative effects of bear markets—-high unemployment, inflation (higher prices paid for essential items) and downward pressure on business revenue (resulting from lower disposal income that limits discretionary purchases and higher interest rates on business loans)—-usually doubles the real-time negative effects of bear markets on the population.

So what is a bear market anyway? Economists declare a bear market when there are sustained declines of 20% or more in (recent) prices of stocks, bonds, mutual funds and commodities across several market indexes and exchanges —Standard & Poor”s (S&P 500), Moody’s, the New York Stock Exchange (Wall Street) , NASDAQ, and the Chicago Mercantile Exchange are among the well-known economic benchmark sources. Bear markets usually occur in tandem with a weak economy.

You may notice that stock and other securities prices demonstrate investor confidence and optimism. The high prices typical of a bull market, polar opposite of the bear market, indicate an expectation that big institutional investors are expecting growth and expansion of the economy. But in a bear market, it’s all about avoiding risk and conserving cash.

So, too, for Freelancers. Pulling back and going on the defense is the smartest bear market strategy. Conserve cash by trimming expenses that do not demonstrably contribute to customer acquisition, customer retention and the customer experience. Manage expenses to preserve your cash-flow. If you are able to save money on a regular basis, so much the better, so that you’ll have funds available to cover business and living expenses if revenues take a serious dip,

Be very cautious about plans to grow, expand, or scale your business and remember that business expansion costs money, a resource that is more expensive to obtain during high-interest bear markets. You can go out of business in a blink if you start drinking from the fire hose and expand too much and too fast.

You can run out of money because you can’t bring in customers fast enough to cover operating expenses. You can also be caught off guard by factors outside of your control—-like a pandemic lockdowns, a boat turned sideways in the Suez Canal, another war or assassination—- that deflates your once/ reasonable sales projections.

Furthermore, customer acquisition and retention are usually more difficult to sustain when disposable income drops and potential customers pull back on spending. Still, with the right strategy you might make money, or at least avoid big losses. Below are actions to help you minimize the bite of the bear.

  1. Open a cash reserve account and aim to deposit 5%-10% of weekly net revenues. If you encounter ether an emergency or an opportunity, you will have waiting for you an interest-free line of credit, so to speak, to carry you through an unexpected cash-flow glitch.
  2. If you sell products rather than services, find back-up supply chain resources so that your shelves will remain stocked even if your usual supplier experiences delays. You must have products to sell when customers want to buy.
  3. Be cautious about plans to expand your venture, unless trustworthy research shows the ROI the time and money required.
  4. Cut excess operating (selling, general & administrative) expenses.
  5. Boost AOV (average order value) by bundling products together to increase sales revenue. Make it attractive to buy from you.
  6. Minimize or eliminate perks —-offsite retreats, meals, travel and the like—- unless you’re spending on customer acquisition or productivity-enhancing skills development.
  7. Raise prices in response to the impact of inflation on the rising cost of goods sold, to maintain profit margins.
  8. Consider investing in long-term opportunities or capital improvements that might now be discounted significantly. Who knows, if the financial prospects are good, maybe you can buy out a competitor who has good market share, but doesn’t have the money to overcome the bear market—/and you do.
  9. Focus marketing in the top three performing channels only and drop those that don’t add much to your sales/ mart pipeline.
  10. Use cash-flow and higher operating margins( (obtained by raising prices) to provide the working capital you need. Remember that the interest you pay on borrowed money from your bank is now higher with rising interest rates.

Thanks for reading,

Kim

Image: © The New York Times The Bear struts his stuff in the Boston Ballet production of The Nutcracker.

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How Does Your Garden Grow?

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Sales at your business venture have finally taken off and it looks like you’ve created a winner—-fantastic! Because you’re ambitious, you’re already thinking about how to capitalize on your success. You’re looking to grow because sustainable growth is the key to maintaining a thriving businesses. But let’s slow down for a minute and talk about how you might grow your venture? Business growth has different meanings and one or more paths can be taken to achieve it. What you’ll need to successfully grow your business is the right growth strategy.

As always, big decisions demand careful thought and you’d be wise to analyze the relevant business metrics and also the marketplace in which as you operate as you ponder the kind of growth you should pursue for your organization. The path to growing your business must fit your marketplace conditions, be acceptable to target customers and enable the venture to thrive within its competitive landscape.

Researching the state of your industry, local business conditions and your marketplace are among the steps you’ll take to assess growth possibilities for your venture. Analyzing your customer base and documenting the rate of its expansion over, say, the past 12-24 months is an obviously important step you’ll want to take, as is studying the pace of sales revenue. Information and insights you discover will shape the expectations and goals for growth and allow you to build a timeline and budget for your chosen growth strategy.

Your business growth plan should be attuned to specific areas of growth. For example, your research and analysis may lead you to conclude that revamping a couple of your B2B services could be expected to substantially increase sales revenue derived from a niche market that you have the credibility and resources to enter. Or maybe relationships that you’ve developed in another city will allow you to grow your client list / customer base by expanding to establish a beach head there.

In many ways, your primary task is to figure out why the business is successful. What market conditions exist or what competitive advantage have you created that enabled the business to thrive? The answer to that question will help you decide the growth strategy to follow. The following are strategies that you might pursue to grow your venture.

Market penetration strategy

Continuing to sell your current products and services to a greater number of customers and in that way scale up the volume of sales revenue derived from your current market. A market penetration strategy is a product market strategy where you achieve increased dominance in the market in which you currently operate. The company grows by increasing market share.

Market expansion strategy

Entering a new market where you sell current products and services. A market expansion strategy means you’ll plan to sell current products and services to a new customer demographic because you’ve maxxed out growth potential in the company’s current target customers. Being able to successfully follow a market expansion strategies you’ll first confirm that you have actually topped out on sales in the current configuration of your market.

Next, research potentially viable new markets, evaluate your ability to reach customers in that market and create a plan to launch. Brand development and customer acquisition will be key components in a market expansion growth strategy.

Product expansion

Launching a new product or service to sell in your current market. The ability to achieve growth for some businesses requires that the company needs to introduce a new product or service. Product development, that is, the creation of a new product/service, or the enhancement of an existing product/ service, enables the company to attract new customers and as it retains the existing customer groups.

Diversification

Launching new products or services to sell to a new market. Diversification can be a proactive way to avoid the fallout of an economic downturn. By offering different products and services, a company can lessen the negative impact of a recession. Pivot to survive.

For smaller organizations, what is technically known as horizontal diversification is most useful. The company will add new products or services to its current line. The products or services may be new, but they often have a similarity to the original product/ service. The company diversifies its line with a clever tweak that expands in a desirable way the options to the customer. You may add a refinement or some sort of updated (or pared down) option that appeals to shifting customer priorities and preferences.

Acquisition

Buying out or taking a controlling interest in another company. Acquisitions are usually only a viable growth strategy if you have excellent cash flow and a generous line of credit at the bank, or a group of deep-pocket investors available. If you have access to money, growing your business through an acquisition is the way to go. You can reduce competition by acquiring a direct competitors, for example. You can also obtain proprietary technology that confers to you a significant competitive advantage. Market share and customer share increase because you capture a new customer base.

To my American friends I wish a happy 4th of July! To everyone, thanks for reading,

Kim

Photo: © Kim Clark June 11, 2021. The James P. Kelleher Rose Garden in Boston’s Emerald Necklace

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Good Questions Are Your Best Sales Strategy

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Many factors influence a B2B sale, including egos and power struggles, budget allocation and politics, trending industry fads and the success or failure of what’s been done before. But as you know, Freelancer friend, you can only control what you can control.

To obtain some measure of control you need information, because knowledge is power. To determine whether there is a sale here for you, you’ll need clarification of the factors listed below, which are known to influence B2B sales. Knowing if there was a recent attempt to reach the goal or resolve the problem before you were contacted is also useful intel, as is knowing if the prospect is actively considering another solution (that would be provided by someone else).

  • Define the problem or goal and learn if it’s high priority or urgent
  • Understand what the prospect wants you to do and when it must be completed or delivered
  • Is the prospect talking to a competitor?
  • The decision-maker
  • Estimated budget

The most efficient way to get the backstory on your sale and create for yourself a realistic chance of winning is to ask questions that bring out the answers you need. Phrase the questions in words that feel natural for you. I think what’s listed below will both lead you to more sales and quickly eliminate those who present themselves as interested but are just not that into you.

1. What led you to contact me/ respond to our outreach?

2. Is getting this project done/ product installed an immediate priority? When would you like to see it completed/ made available?

3. Have you been using a solution (i. e., a product or service) that isn’t working? What fell short of your needs?

4. What. are three key outcomes you want to occur when the goal is reached/ problem is resolved?

5. What other options are you currently considering?

6. Which department in your company will be the end users of the product/ or who will be my contact as the service is implemented?

7. What kind of support/ training/ post-sale service would your team like to receive as the solution is being implemented or when the product is purchased?

8. Are you the person who decides the budget for this project and has funding been allocated?

9. Based on what you’ve told me, I think my organization can help you achieve your objectives. I’d like to work with you! What is your decision-making process like?

10. Is there anyone else who might appreciate having a conversation about this solution? Anyone else I might speak with?

Thanks for reading,

Kim

Image: Judy Holliday (standing) has a couple of incisive questions for her husband (Tom Ewell) and the other woman (Jean Hagen) in Adam’s Rib (1949, directed by George Kukor and starring Spencer Tracy and Katharine Hepburn).

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Making Sense of Your Data

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When you think about it for a minute, you might agree that basically every aspect of your business can benefit from relevant and timely information—-i.e., data. However, your potentially helpful data can leave you with a puzzle to put together, unfamiliar terrain to navigate, before you can make sense of the information and understand the picture it’s trying to show you.

The puzzle pieces that contain your data could be expressed in various formats, e.g., columns of numbers, pie charts, bar graphs, or the written opinions of researchers and thought leaders. Furthermore, the data sources often use different benchmarks and measuring standards and make getting a sense of things sort of a wrestling match.

Analyzing data reminds me of buying produce at Trader Joe’s and Whole Foods. At Trader Joe’s, the bananas are 19 cents each and there are no scales. At Whole Foods, bananas are 49 cents a pound. How can I calculate what I’m paying for the fruit or the other produce that I buy at each market and compare prices?

Data analysts and other experts say that for much of the information we access, tools that cut through the maze and bring focus to the picture, such as identifying patterns and trends for you to consider, are a must. Otherwise, you’ll be unable to fully comprehend the data’s story, unable to make good use of the information and enable it do what you need it to do, which is to support good decision-making. Micrsoft Excel or Power BI, Python, Jupyter and Apache Spark are among the most highly rated data analytics tools.

Among the most common functions that data analysis is called upon to provide insight are:

Marketing teams use data to examine website visits, often by way of Google Analytics and social media stats, by way of services such as BuzzSumo, Sprout Social, or HubSpot. Understanding what’s happening in the company’s marketplace and revealing customer behavior by analyzing Descriptive Analytic data is a typical goal.

Sales teams use data to understand the customer buying journey and learn what motivates a sale, along with revealing customer buying patterns. With access to unlimited online information, prospective customers are better informed about potential purchases than they’ve ever been. B2B sales researchers have documented that prospects are usually 80% of the way through the buying cycle before making contact with a sales team. Customers are in the driver’s seat.

Finance/ Accounting teams have always had access to the reams of data that’s attached to invoices, accounts payable and receivable transactions, sales revenue, inventory counts and other movements of money and resources.

Operations teams are charged with continually reviewing any number of business processes, from how to source or manufacture the products and services that a company sells, to recommending the most optimal methods to connect those products to customers, to ensuring that company offices are equipped with effective HVAC systems. Obtaining data that reveals operational efficiencies and enables business functions to be executed in the easiest, fastest and least costly or risky methods is the eternal goal.


Yet the question has always been, how can anyone—-multinational conglomerate or Freelance solopreneur—-maximize the value of your data?

  • Put data to work Your data is wasted unless you examine it, interpret it and let it guide your actions and decision-making.
  • Sort and analyze Appropriately grouping, categorizing and analyzing your data makes business intelligence tools necessary when working with large amounts of data. Today, data analysis means Artificial Intelligence. AI-powered systems will in mere seconds collect, sort, analyze and make meaningful recommendations for you and your team to review and evaluate. If that’s not enough, your AI tool will ”learn” from the data you feed it and the recommendations it makes to continually refine and improve the outcomes.
  • Strengths into opportunities Let your data show you where you shine. Maybe it’s your amazing referral rate or customer retention rate. Maybe it’s the memorable customer experience that you create or the loyal followers who’ve turned into brand cheerleaders for your company.
  • Prioritize Get clear and pragmatic about goals and objectives the organization would be wise to pursue over the long and short terms. Your customers and their emerging preferences and priorities are certain to influence the strategies and actions that emerge at the head of the line. Let the marketplace guide you.

Thanks for reading,

Kim

Image: © Warner Brothers Pictures. Malcolm McDowell in A Clockwork Orange (1971), directed by Stanley Kubrick 

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Moving the Needle on B2B Sales Deals

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Selling B2B professional services is no day at the beach, as you’ve probably deduced by now. Getting B2B sales deals across the finish line can be an uphill marathon that leaves you face down on Heartbreak Hill. Unlike your B2C colleagues, you can’t ride the wave of multi-million dollar product launches or other advertising campaigns to convince prospects of the amazing benefits that your product or service delivers.

Moreover, there are no impulse buys in B2B, no equivalent of customers adding candy to their shopping basket while waiting in the check-out line. Your marketing campaigns and sales pitches speak to business goals with a deadline and problems that must be resolved.

On top of that many, if not most, B2B services that Freelancers provide are unlike the various software as a service products that can be easily compared and evaluated, feature by feature. Once a prospect has found you, it’s necessary to pitch your solution in a narrative mix of hard facts and soft skill intangibles that portray you and your capabilities as an effective and trustworthy choice.

In some instances, you may even work to convince a prospect that there actually is a problem to solve, that something can be done in a faster or easier way. As a result, the sales cycle of the typical Freelance consultant is long. So what can you do to keep the pipeline filled and your cash-flow positive now and into 2022? There are some cultural shifts to keep in mind as you consider strategies that you might implement.

The Great Resignation factor

In the early 2000s, I started to notice that important contacts at companies with whom I worked regularly disappeared in about two years. Not good! So much of obtaining repeat business depends on relationships. It costs you money when an ally leaves a prospect’s decision team. You may not know where they’re going next and they usually don’t take you with them by introducing you and your services at their next assignment

This phenomenon is detrimental to the future of your business. The Great Resignation factor (addressed in the September 7, 2021 post) has heightened this trend. Freelancers are advised to include this reality in client pursuit and post-project client retention strategies. You can’t control what will happen, but knowing that a change is brewing gives you the opportunity to ask who will join the project discussions, so you’ll have a chance to begin building a new relationship, starting with an email introduction.

The 2021 LinkedIn Global State of Sales Report, which surveyed 7,500 B2B buyers and sellers in 11 countries, advises sellers to stay current with intel about project decision-makers and stakeholders. The survey found that 25% of decision-makers either change roles or leave the company in a given year. The survey also found that unfortunately, 85% of sellers reported that they lost at least one sales deal, or that a deal was delayed, because a key stakeholder left his/ her job. Of the many advantages acquired by tactfully remaining in touch with the primary decision-maker and influential stakeholders of every potential sales deal is receiving updates regarding who’s on and who’s off the team.

The Work From Home factor

Some companies have at least temporarily continued the work from home protocol for their employees when possible, but many have begun asking staff to work on-site at least 2 – 3 days/week. Still, the practice throws cold water on face2face sales meetings. The 2021 State of Sales Report indicates that B2B virtual selling gives the advantage to buyers, however McKinsey reports that 76% of B2B buyers prefer in-person sales meetings, or at least a telephone meeting. when evaluating a product or service that they’ve not used before. Zoom is convenient but apparently not considered ideal for first time meetings.

When appropriate, McKinsey found that 46% of B2B buyers say they’ll make purchases online online, but only 10% do so. Notably, 46% of B2B buyers feel it’s too difficult to compare the available products online. These buyers also are dissatisfied by the frequently slow responses to their inquiries.

The Digital transformation factor

Warning: 70% of digital transformation initiatives fall short of expectations. McKinsey reported that companies achieve the best results when a combination of human and digital interactions create a hybrid buyer’s journey. Because prospective buyers appreciate fast answers to their basic questions about your products and services, installing a chat bot and adding a FAQ tab to your website will expedite the delivery of information and facilitate a satisfying buyer’s journey that instills trust in your company and its solutions.

If you are tech savvy, explore and evaluate UX (user experience) and UI (user interface) digital tools. The free Adobe XD starter plan lets you design digital features that maximize the impact of touch points along the buyer’s journey, after-sale service experience and other customer service experiences that you’d like to enhance. Think carefully about how much digital interaction your prospects and clients will appreciate and strike a balance between digital and human communication.

Thanks for reading,

Kim

Image: Commodities traders at the Chicago Mercantile Exchange (founded in 1874)

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Kick-off FY 2022

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Hello July! Fiscal Year 2022 has arrived and happy new year. Calendar year people are greeting the second half of 2021. As businesses throughout the U.S. shake off the shutdown, we can be confident that nearly every business owner and leader is working to decipher what the post-COVID landscape looks like for their enterprise and how to make it profitable. It’s time to double down and make up for revenue losses.

In-person encounters are on the rise. Work from home policies are receding and employees are being asked to return to the office, if only for two or three days a week. To position your organization for a fourth quarter recovery, July and August are the time to put pedal to the metal and revitalize your company.

First thing, if you haven’t done so already, is to determine how much revenue was lost during the shutdown. It’s a bitter pill to swallow, but that information will greatly support your recovery plans. When you know about how much revenue was lost, you’ll know how much revenue you’ll need to generate to get back on your feet and you can start to think realistically about how you might be able to do that. Use your 2019 year- end P & L figures as the 2Q 2020 – 2Q 2021 benchmark.

Focusing on the marketing and operations functions of your company will be useful as you develop rebooting strategies. The typical Freelance consultant is familiar with marketing and may even dabble in it, at least in the social media realm. However, operations is often outside of our B2B knowledge economy comfort zone. It shouldn’t be.

Operations encompasses whatever it takes to acquire or produce your product or service, get it into the clients’ hands and do so efficiently, with a goal of maximizing productivity and minimizing costs. If your clients have made adjustments in how they do business, how they serve their clients, you may have to change along with them. Changes in how you provide your products and services is an operational issue.

Pivoting to videoconferencing from in-person meetings when clients opted to work from home was an operational change for all involved. The response to that change entailed not only a change in communication but also technology and skill set upgrades (or the meeting tech was outsourced, at a price).

You’ll continue to work the operations angle as you consider the financial, technical, educational and even networking resources and activities you may need to launch your recovery, as well as the timeline. You may need to confront the reality that while some clients were able to adjust to the pandemic restrictions and bounce forward, with some having resumed working with you at some level, others may be gone forever. In other words, assess the size and likely revenue potential of your client list.

Operations will look different in every business but in your B2B service venture, be aware of operational processes, which also include invoicing and getting paid. Use the post-pandemic reopening process to rethink what you do, how you do it and for whom you can do it now that maybe a couple of big clients aren’t working with you anymore. Do you need to revamp your business model and reevaluate your value proposition? How will you you reach out to clients now?

Ramp up marketing with content and PR. Increase the name recognition and visibility, credibility, trust and perceived expertise of your business venture (and you) with text, audio, or video content that reaches out to current and prospective clients to educate, inform and engage with them. Content is still king but distribution is now queen. You must create content that persuades prospective clients to follow-up with your organization in some way—-listen to your webinar or podcast appearance, read a case study, request a free 30 minute consultation.

Include distribution in your your PR/content strategy. Not every prospect will find your content through your website or social media and that is why sending a press release to print or digital publications that are trusted by those who could potentially buy from you is important.

Work on finding good speaking engagements and use them to create a compelling PR roll-out. In-person events are being restarted. Let that inspire you to pick up the thread and reach out to organizations where you’ve appeared before, or contact those on your wish list. You could be a keynote speaker or moderate a panel. Podcasts and webinars are still a thing. Just get yourself in front of a good audience, so you’ll generate buzz in the right circles.

Your PR strategy might consist of first, confirming that the host organization will do a PR campaign to publicize your appearance. On your end, you’ll post the notice for your talk on Alignable, Facebook, LinkedIn and Twitter accounts. Post your event in the local Patch if the location where you’ll speak is part of that community and also send a press release to local community newspaper. Be advised that if the editor chooses to include your story, many community newspapers will simply publish your press release so make sure that your story is concise and compelling.

As your name and your company’s appear in various online media, there will be positive impact on search engines. Google favors companies that EAT—expertise, authoritativeness and trustworthiness—and that’s who gets the highest page rankings.

An online presence makes your company more prominent and brings those looking for your category of products or services to your website and social media pages. That is precisely what you want, whether or not you’re rebuilding your business, because leadgen is always a priority. As you attract new potential clients, your updated operations will greet them with a seamless and pleasant experience, that may result in referrals.

Thanks for reading,

Kim

Photograph: © Associated Press 1996 created by Lynne Sladky. Carl Lewis qualifies for the long jump finals at the 1996 Summer Olympic Games in Atlanta, GA (USA).

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Go Agile

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Life brings change and it seems as if change occurs at a much faster pace these days. Then again, the same observation was probably made in the Middle Ages or even when the pharaohs ruled. The world continues to turn and every day is new and brings a unique set of circumstances. How we respond to fluctuating conditions has a big impact on our fortunes in life.

The ability to move quickly, whether to take advantage of goodies that unexpectedly appear or dodge something unpleasant, is a skill known as agility and it is worth cultivating. In business, the ability to incorporate agility into strategy, management and culture enables company leaders and team members to facilitate smart decisions that enable beneficial changes that can be instituted quickly and efficiently. This capability delivers a number of advantages, often making a business more competitive, sustainable and ultimately, more profitable. During periods of generally adverse business conditions, agility often makes the difference between keeping a business viable or presiding over its failure.

Benefits of an agile business 

  • Responding to new market conditions or competitors. Every business will at some point encounter a wily competitor or challenging market conditions. When agile practices are baked into your organization, the leadership team will be better prepared to adjust to evolving conditions. You expect change—you monitor the Key Performance Indicators, you pay attention to the competitive scene, you follow industry developments that help you anticipate what might impact your organization, for good or ill. You are accustomed to making decisions and changes to accommodate new realities. The agile business is resilient.
  • Solving and responding to problems. The pandemic shutdown has been Problem #1 for most of us. Hollowed out industries, disappearing clients, supply chain delays and difficulties in finding help thanks to the stimulus payments that have made staying home more profitable than working for some. These and other disruptions can prevent you from efficiently serving your customers. But leaders of agile businesses have been training like a prize fighter, giving the entity quick reflexes, effective offense and defense strategies and stamina to weather the storm. You’re able to recognize what may become a problem and proactively institute alternatives that will soften the blows and limit damage. The agile organization is prepared to defend itself and prevail. 

Tools of an agile business

  • A Robust data streams. Agility won’t help you unless your decisions and actions are based on 1.) objective data and 2.) you measure what it makes sense to measure. Accordingly, your first goal should be establishing credible and relevant streams of data for key aspects of your business. You should consistently measure your performance in every department, and across the entire business. Analyzing and interpreting the data will help you figure out which actions to take next.
  • Fast decision-making. Agile businesses are capable of making important decisions quickly. That capability requires both preparation and courage. If a problem arises, a quick decision can mitigate its impact. If a competitor emerges, your agile business may be able to pivot in a matter of weeks, instead of months. This usually means avoiding the development of slow, bureaucratic systems in favor of those that support decisiveness and action. Good data, especially in the form of well-chosen KPIs, is essential, as is the willingness to act on it.
  • Flexible systems. Flexibility is crucial for agility. If your technology infrastructure and operational workflows can’t accommodate rapid-fire changes or expansion, they’re not going to support agility.
  • Innovation. Your organization also needs a mechanism and encouragement for innovation. For agility to be effective, it needs to foster and support novel ideas, including ideas for new products and services.

Practices of an agile business

  • Encourage entrepreneurial thinking. If you’ve built a good team, you’ll be able to extend to them a degree of autonomy. Empower your employee in to develop a sense of ownership and behave as if a steward, a stakeholder, of the enterprise. Encourage them to solve their own problems and allow them to make their own decisions whenever possible. The more autonomy your employees have, the faster they’ll make decisions (and the more agile your business will become).
  • Foster clusters of small teams. Big, hierarchical organizations have some advantages, but they’re inherently unagile. Instead, it’s better to work closely together in small teams. Try to avoid becoming overly bureaucratized.
  • Avoid becoming too accustomed to anything. Don’t get too attached to anything in your business, including people, software, workflows and even the company culture. You need to remain flexible and willing to incorporate new ideas.
  • Cut whatever isn’t working. Whether it’s a new tactic or a strategy with a long history of producing results that at one time pushed the company forward, you need to be willing to cancel whatever isn’t working. If it doesn’t provide an objective benefit to your organization, get rid of the dead weight.
  • Check in regularly. You should have reliable metrics to inform you of your progress and check in with them regularly. While you’re at it, ask for feedback from your employees and ask how they think the organization could be made even more agile in the future.

Thanks for reading,

Kim

Image: Olga Korbut, superstar gymnast from Minsk, Belarus (formerly USSR) at the 1972 Summer Olympics in Munich, (West) Germany. Korbut won four gold and two silver medals at the Games.

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Crash-Proof Your Business

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If there’s anything Freelancers and other business owners and leaders have learned over the past year is that positioning your company to survive adversity is high priority. Baking in stewardship policies that include risk management strategies designed to shield the company from the effects of marketplace instability (or maybe just a tough competitor) is a must-do.

Maintain the business in the way you maintain your home—painting the deck, caulking bathroom tiles, checking the foundation for cracks, putting a sealant on the driveway. When the inevitable blizzards and hurricanes arrive, you’ll weather the storms (earthquakes and tornadoes are something else again, of course).

There is no precise formula for the process. I recommend that business owners and leaders focus on the reliable benefits derived from this short list of basic resources: human capital, operational capabilities, a healthy culture and cash reserves.

Whether a solopreneur Freelancer or leader of a team of 100 or more, know that good leadership yields the best business results, in good times and bad. Those at the top of the organizational pyramid are the responsible party and have great influence on whether the venture finds success or failure. Creating a sustainable business model and obtaining sufficient start-up and working capital are how a good business is born. But there is more.

Company culture

Creating a healthy company culture is a business-sustaining strategy. Business owners and leaders should understand that when top-down and bottom- up communication is the norm, when leaders model a strong work ethic, when transparency and best practices are followed both internally and externally in customer relationships and when respect, coupled with a degree of autonomy, is given to employees at every level, a winning strategy, expressed through a healthy company culture, takes hold. Good company culture results in employees who are happy, productive and loyal to the organization.

Human capital

Providing skills-building training and coaching is an investment that also encourages employee loyalty and enables company leaders to maximize their productivity. Such policies and practices nurture company loyalty and come as close as possible to ensuring that when the going gets rough, the company will have a team dedicated to the organization and willing to work hard and smart to support a turnaround. This strategy also gives companies a reputation as a good place to work and acts as a magnet for top talent.

Strategy

The most effective business strategies are uncomplicated. Learn to distill yours down to one page. When speaking to your banker or potential investors, potential strategic partners, or high-level talent you’d like to hire, the ability to articulate a readily understandable and relatable business strategy will build confidence in you and the company you lead. Start clarifying and simplifying the strategy that guides your venture:

Vision for the future

Big picture goals (short-term, mid-range and long-term)

Key Performance Indicators and the department responsible for each

Top line revenue and market share, two metrics that indicate the quality of the business strategy.

Execution

Strategy is nothing without execution. An effective leader gets the plane into the air and flying at cruising altitude. To achieve that aim, properly trained staff, effective and intuitive workflow protocols, IT hardware and software that create operational efficiencies, quality control and an end-to-end positive customer experience are required. Errors, confusion and duplication of work undermine productivity, erode employee morale and result in weakened revenue and profit.

Defining the intended outcomes, practicing good communication, establishing efficient workflow organization, the required technology and the appropriate staffing level and expertise will likely repair obstacles to proper execution. Action plans, complete with departmental responsibility and due dates that the team consents to, ensure accountability and optimal results.

Cash

Small to mid-size companies would be wise to hold in reserve three to six months of projected operating expenses. That sum is meant to carry your company through a difficult time or allow you to take advantage of a business opportunity.

Bear in mind that every business is different. The amount of your company’s cash reserve will depend on where the company is. Start-up, new product launch, capital improvements campaign, or growth-expansion-scaling periods are not the time to build the reserve because available cash must be used to support those important initiatives. Discuss with your accountant about when it will make sense to start a capital reserve fund and how much it should hold.

It is also possible to use financing to build your company’s cash reserve and now may be the time to act. The SBA’s Paycheck Protection Program (PPP) Loan on March 30 was extended until May 31, 2021. The PPP Loan can be forgiven and essentially become a grant, but not every loan recipient is able to fulfill the qualifiers. Worse case scenario, the PPP must be repaid within two years at a 1% interest rate.

Thanks for reading,

Kim

Image: The Indy 500

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Grow, Expand, or Scale?

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Business owners, including my clients, are known to start bandying about the term scale once they’ve been in business for a couple of years and they are bringing in a few customers. They are in search of a few more customers, so that they can make more money.

So the prospect is referred to me by way of a mutual colleague, makes contact and shares his/her agenda with me. “I want to grow and expand my business. I’m ready to scale. Can you help me?” “Yes, I’ll be happy to help you with that,” I reply. “Please tell me a little more about your company and we can set up a time to talk.”

To be honest, until recently I’d never given the terms much thought, other than they all mean growth—-more customers, more revenue and more profit (ideally) for the company. However I’ve come to realize that there are real differences between them and that they should not be considered interchangeable.

While basically all ventures can grow and growth is a perennial goal, not every enterprise can achieve growth through either expansion or scale. It all depends on the business and what the owner(s) would like to do.

Growing the business

When a business owner or management team decides to grow the company, the strategy is to add certain resources—money, technology, training and staffing, say—-to produce more sales and therefore, revenue. But essentially, not much changes in the way business is done.

If the business hires two new employees and also buys new computers plus a software program that speeds up order processing and keeps track of inventory, for a total investment of perhaps $125,000 (staff salaries are ongoing at $120,000 / year total), the expectation may be that in one year the investment would be covered by the additional revenue that the upgrades make possible and that by year two, sales revenue will increase by 15%/ year for the next 3 years and then continue to more modestly trend upward, producing growth in the high single digits until market conditions change.

If the business leaders want more growth, more money must be invested. The resources needed might be too costly relative to the desired results.

Expansion

Growing the business through expansion is, as noted, another strategy. The business owners or leaders may open more locations if demographic and other marketing research indicates that a significant number of current and potential customers live in certain zip codes and would spend more money if stores could be more convenient to visit.

Likewise, introducing new products or services to the marketplace is capable of expanding the customer base and revenue generated. Entering a niche market is another potentially successful expansion, i.e., growth, strategy.

Like traditional business growth, the costs associated with business expansion can be significant and in fact the costs can be much more significant if opening new locations is involved. As well, a new product launch is potentially a costly undertaking. Entering new markets is usually less costly, but a special marketing campaign may need to be developed and rolled out to reach the new demographic.

But not every business can expand. There may be no additional markets that can successfully be entered. Opening additional locations may be neither affordable nor beneficial. Developing and launching a new product or service that fits with the organization’s mission and current line may not be possible or practical.

Scaling the business

The idea of scaling a business to promote significant growth gets all the publicity these days. When business leaders create a strategy to scale a venture, sales revenue is meant to be generated at a much lower cost per unit sold relative to the scale- up investment made because the production process becomes much more efficient. Automation of one or more key functions is the usual method used to keep overhead costs low (few employees and little office space, for example). A successful scale enables the number of customers reached and served and corresponding revenue generated to grow exponentially. The more efficient the means of mass production and delivery of a company’s products or services, the more scalable the company will be.

Drop the price of producing the widgets from $2 each to 80 cents each and sell them at the original price, but sell 10 times as many as you used to. That’s scale. Hire a new employee or two and buy a new piece of equipment so that you can produce more and manage a moderate drop in production price along the way, so the widgets that once cost $2 each at wholesale now can be bought at $1.25 each because you’re buying more of them and a discount kicks in. That’s growth. Open up a new location, launch a new product or service, or enter a new market, bringing in new customers or give your usual customers new reasons to shop with you and that’s expansion.

Thanks for reading,

Kim

Photograph: Snow drops in the Fenway neighborhood of Boston scale their operation.

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2021: The Comeback

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It’s a New Year and now is the time to engineer a fresh start for you and your business. Take a few deep cleansing breaths to clear your mind and allow the big picture of your business, competencies, clients and relationships to come into view. Now you’ll be able to pull up the strategic insights and resourcefulness you’ve honed over the years and brainstorm how you can reposition your company to outwit the COVID-created obstacles that have hemmed all of us in over the past nine months. If the virus can adapt and retrench, so can you!

Predictions for the viability of several once thriving industries is less than optimistic, I’m sorry to say, but some Freelancers and business owners will be buoyed by other industries that flourished during the pandemic and can be expected to continue to do so. Among those fortunate few are:

All aspects of healthcare, from Freelance grant writers who work to obtain funding for life sciences research, which includes the development of vaccines, to start-up entrepreneurs who seek to patent and sell medical devices, to owners of medical billing services.

All aspects of technology, from Bitcoin entrepreneurs, to experts in cloud computing solutions, including digital data storage, to those who provide Artificial Intelligence solutions.

Prepared meals, available for curbside pick-up or delivery, were already trending upward and sales have skyrocketed since the advent of pandemic quarantining. While some who got an early start in the marketplace are succeeding by offering meat-potatoes-and gravy American standard menus, recent successful home meal caterers seem to be following the advice of 1930s burlesque queen Gypsy Rose Lee—-you’ve gotta have a gimmick. The popularity of Keto, vegan, organic, vegetarian, gluten-free and Paleo menus are claiming an increased market share.

Because so many of us are at home all day, unemployed, underemployed, working from home, overseeing children’s online schooling and unable to access our usual social outlets and networks, the cocktail hour has taken on a renewed luster. In other words, business is brisk at wine and liquor stores.

If you’re not a good cook, not a techie, you’re not an engineer who can develop a product, you have no interest in writing grants and could never raise the start-up capital needed to open a liquor store, all is not lost. The second-oldest Freelance career, real estate, is still going strong, particularly in the residential sector.

Condominium and co-op sales at the 8-figure top of the market in big cities have been softening for about two years now, but sales in sun belt states and suburban communities are doing very well. COVID has caused all of us to spend much more time at home and families require more living space now that the adults are often working from home and both need a home office. Children need not just a playroom, but also an in-home classroom for virtual school.

Furthermore, many who now work from home are looking to get out of small and expensive city apartments and move to the suburbs. Now that there is no more commute to the office or access to the entertainment, culture and networking opportunities that once justified the price of urban life, why continue to feed your greedy landlord?

Freelancers who have at least mid-level sales skills and are curious about entering the real estate field should first explore the trends in their locale. Finding a friend who is a licensed agent to tutor you in the ins & outs of the business would be a useful step two. Next, obtain a real estate license and try your luck with rental property to start. Maybe your real estate mentor will recommend you to a company who’ll bring you in as an agent.

Expect and prepare for change

Have you noticed that those who so cavalierly lecture others to welcome and embrace change are nearly always untouched by the change they tell the rest of us to welcome? Change may be inevitable but it is nevertheless unsettling and is sometimes destructive. We have good reason to fear change because the outcome can be ruinous. That said, life is all about managing risk, avoiding or overcoming obstacles and recognizing and pursuing opportunities.

We must all prepare for change, whether we see it approaching or get blind-sided by its sudden impact. Create your ongoing risk management strategy by keeping up with professional development. Regularly read up on developments in your industry so that you’re not caught unawares by policy or customer preference changes. Investigate technologies that will make your company more appealing and responsive to clients and make doing business with your organization more efficient. Always, look for ways to conserve cash.

Stay abreast of customer priorities

Understanding the needs and emerging priorities of clients enables you to recognize future business opportunities for your company and that information will be a crucial component of your nimble response to change and crafting a successful comeback. Including a short customer survey with an invoice will give clients a chance to voice how they feel about your products and services, tell you how your organization can improve and might even give you early warning on the next big thing.

Talk to your clients and learn what you can, politely and over time, to learn what keeps them awake at night and what they’re prioritizing now, or may prioritize in the near term.

Expand your client list, even if you’ve been lucky enough to work with an organization that has prospered during the pandemic and is giving you generous billable hours or sales. As we know, things can change. Back up, back up, back up.

Work smart

I don’t care what anyone says, I still feel that good luck, good timing and knowing influential people are the determining factors in building a successful business enterprise. Hard work matters, too, but billions of people on planet earth work hard every day and starve as they do. Working smart is the better choice, even if your luck and timing aren’t so great and no one’s looking out for you.

Meeting the right people is helpful, but it’s always been random and is difficult to do by way of videoconference, a method of communication that is not conducive to bonding with new colleagues and friends. It’s probably best to look for ways to refresh relationships with strategically placed friends and colleagues who you feel may be inclined to help you. You should also consider ways that you might help them as well and make that known, to get the reciprocity rolling.

Be ready for whatever good luck or timing might come your way by being visible and looking viable. Participate in virtual business or social events so that you’ll see and be seen. Use the chat function to message colleagues and privately say hello and potentially suggest a socially distanced coffee or drinks meet-up.

There are no guarantees but taking steps to package and present yourself and your company as prepared, proactive, nimble and viable is the surest route to your successful comeback.

Thanks for reading,

Kim

Image: Sylvester Stallone (L) and Burgess Meredith in the Academy Award winning movie Rocky (Best Picture, 1977)