Here we are entering a new year. The clock restarts, we get a new shot at hitting our business goals for the year, it’s fresh and exciting… until it’s not, and we fall back into the same bad habits we have always had, and then next December we’ll wonder why we didn’t move the needle forward.
If you remember one thing from this post, remember this. Don’t be afraid of failure, be afraid of being in the same exact spot you are right now a year from now!
The fact is we spend our time worrying about making mistakes that will lead our business to a catastrophic failure. The reality is that even the stupid decisions we occasionally make are unlikely to produce that kind of result. Business failures are most often a death by a thousand cuts. It’s many small mistakes made on a daily basis, that eventually leads us to running out of cash and having to close our doors. Or worse yet, we go along for 20 years just scraping by. We kid ourselves into thinking, just one more year, then I’ll make real money! Then, one day you realize you have been at what you do for too long, want to exit, and you find out the business you have been trying to build for 20 years is worthless.
Now, I’m not trying to be the buzz kill for your New Year high, but you need to break bad habits, and get out of your comfort zone if you’re going to hit that record year. So, let’s review 3 things that most small business owners are getting wrong, that you can work on changing now, and all it requires is you to think differently.
- You Don’t Differentiate
Differentiating your business is key to standing out and having clients seek out your products. It is the difference between playing in a blue ocean (a space in which you have little or no competitors, think wide open spaces) or operating in a red ocean (a space where competition is thick and cutthroat, think blood in the water).Differentiation can be as simple as combining multiple existing products into a new offering, or new category. Proctor and Gamble did this when instead of just selling toothpaste, they combined toothpaste, fluoride rinse, and other items into a new category of “whole mouth health”. It changed the way the customer looked at and purchased the products.
I work with many clients in the IT Services space, and when I ask them to tell me what is their USP (Unique Selling Proposition) or what differentiates them from their competition? I get the same list over and over. “We have better people”, “We explain technology in plain English”, “We deliver superior service”. Really? This is different? It’s not, move on.
In the IT space, when we first moved to the Managed Service Model, it was a differentiator. The idea of acting proactively and preventively was a game changer. Everyone else was still responding like a firefighter to a 5-alarm blaze. Those of us who embraced the new model, were able to offer a new alternative. Our goals were now aligned with our clients. Before, when the client was down, we made money and they didn’t. After putting clients on all you can eat agreements, when their systems were down and losing money, the longer it took us to resolve the problem, the less we made too! This made sense, and it allowed us to create profitable recurring revenue streams. Everybody won. But now, those are table stakes. This is now the expectation, and we need to find new ways to differentiate ourselves from the competition. Blue oceans only last so long. What’s the next way for you to stand out? Find it or be content with mediocre performance.
- Failure to communicate value proposition
Even if you do have a differentiated offering, when we get in front of a prospect, we make the mistake of explaining how we do everything better than our competitor. While this may seem like the intuitive thing to do, it’s not. Studies have shown that the more we talk about how we are better than our competition, the more we look like them to the prospective customer. In their mind it is just more of the same, and the only thing we have convinced them of is that we sound just like the last salesperson that came in here. Now they are convinced more than ever that they can safely go with the lowest price, because we are all the same.The key to this is to go into your prospect, ask good questions, and shut the hell up! We all have such a predisposition to go to sales meetings with our product slicks in hand, excited to tell the prospect how we are they greatest thing since sliced bread, spouting about speeds and feeds. The reality is, they only care about one thing. How are you going to solve their problem. But you didn’t even think to ask what it was. When we ask good questions, we learn what the prospects concerns and fears are. Then we can provide a solution that solves their issues. Rarely are their concerns aligned with the features and benefits we spend 58 minutes of our hour meeting talking about.
Next thing to remember from this post, if during your presentation the prospect says, “that’s right, I agree completely”, you didn’t win. You lost. You didn’t teach then anything new, you just reiterated what they heard from everyone else. That means again, low bidder wins. You win when the prospects says “huh, I never thought about it that way. Now you have educated them and set yourself apart from the competition.
- Inability to develop leaders
So many of us have the dream of leading our own company and being our own boss. We have the vision of standing at the helm of our ship, barking out orders while our minions do our beckoning. If this is your vision of leadership go buy a copy of Master and Commander and some popcorn, but don’t try running a company. I can tell you from personal experience, you are in for a rude awakening.First of all, being a leader doesn’t mean everyone works for you, it means you work for them. Your number one responsibility now is to make sure that your team has absolute clarity in their mission, that you have provided them the training they need to execute it, and that you have provided them the resources necessary to execute the tasks at hand. If I talked to one of your team members and ask them “what is expected of you” and “how will that expectation be measured?” and they respond with they don’t know, you have failed.
In today’s age of information there is no way for you as a leader to have all the knowledge that is needed to execute at a tactical level. That is what you have subject matter experts for. The problem is you need to get out of their way and let them do their job. Micromanagement is no longer an option if you want to grow. You need to develop leaders at every level of your organization, and you need to understand that the people who have the knowledge most required to solve the problem, are the people closest to it.
In a mature organization a leader does not stand on high and dictate orders from above. A leader is approached by a leader with a specific knowledge set who comes to them and says “the problem we currently face is…. and I intend to….”. This is the sign you have developed a team that can stand on its own without you no matter what the issue, when they come to you with solutions, not just problems.
There is a saying that “no plan survives engagement with the enemy”. This doesn’t mean you don’t plan; this means you allow your people the flexibility to adapt to the conditions on the ground when the caca hits the fan. If they can’t think for themselves under stress and have to come to you to be told what to do, you have failed.
The upside of all this is that when you get these lessons right you have an organization that can grow exponentially. Your profitability and growth potential is uncapped. You have built something that can survive you and can has the potential to be an enduring legacy.
Sources to learn more about the ideas presented in this post can be found it:
https://www.amazon.com/dp/B00AJVJ1HI/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
If you have any questions about this post feel free to reach out to us at info@encoresc.com
We look forward to helping you Profit, Grow, and Exit.