Friday, May 28, 2010

Writing Your Business Plan - Make it Modern?

Many of us learned how to write our first business plan in business school.  My first business plan, was a whopping 120 pages of...fluff, diagrams, thousands of pages of projections, etc.  Read like a textbook - BORING.

How does yours look like?  The longer I've been running PeerFX, the more I find that everybody is constrained on time, and usually a 20 slides slide deck or an exec summary is sufficient for an investor to decide if they want to see you.  Then it's your performance during your meeting that gets you the money.

What is a business plan for anyway?  As Seth Godin puts it - for us to think through the actual implementation.  Write it so that after reading it, YOU would be convinced to put money into it.  Seriously, if you can't communicate how your business is going to make a gazillion dollars in less than 20 pages (including appendixes!) then I question whether you've nailed down your business details enough.

I say that the business plan components have to be continually revisited - anyone that has gone beyond just writing the plan would know that it never happens just like it.  If it does, please go buy a lottery ticket because you're seriously super lucky.

So what components are in a Modern Business Plan?  5 things
  1. The TRUTH - look all around you, how does the environment affect your business - be realistic - you have competitors, existing alternatives, the economy...
  2. Assertions - How do you propose to change the way things are done?
  3. Alternatives - like I said, never happens like you want it - so what do you do for plan B, C and D?
  4. MONEY - money, money, money - without money either in the form of revenue or investment, you don't have a business.  Figure out your finances!

Read more about Seth's push for writing a modern business plan here.  THEN WRITE ONE.  Reading without doing you learn nothing.
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Thursday, May 27, 2010

American Express Accepted Everywhere

Over the years I grew up with American Express being positioned as a prestigious, high status credit card brand.  They worked so hard on it that they made sure their cards were accepted only at places of high status - luxury restaurants, hotels, etc.

Then I saw this at Eaton's Centre in Toronto the other day.  Made me think: "Burger and American Express?  Really?" 

An Amex black card may even have been a goal for some aspiring businesspeople out there, but now that they can use the Amex card at the local burger joint, what does this do to the brand?

I wonder why Amex made the decision to go mainstream and compete for the same customers that are currently catered to by Visa and MasterCard.  They had a nice little niche - is it because the high status, high spending group is shrinking?  Or they feel like they've saturated that market?

What do you think is the reason for this switch in brand positioning?
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Wednesday, May 26, 2010

The Mirror Test Book Review + Interview with Kodak's CMO Jeffrey Hayzlett

Image representing Jeffrey Hayzlett as depicte...Image by via CrunchBase
Jeffrey Hayzlett's book "The Mirror Test" is a hands-on guide for small business owners and entrepreneurs that are looking to start a business or are reevaluating their current way of doing business.  After reading it I actually think it's a wake up call for business owners and start ups that are getting too comfortable with what they're doing.  Jeff says that his job involves creating tension in his company, to challenge the way things are currently being done in order to get innovation.

I was fortunate enough to meet Jeff at an SMEI presentation where he was the keynote speaker.  I bought his book and asked him to do a book review - surprisingly he said "Sure."

So here are the 10 questions that I asked Jeff in 20 minutes.

F: Florence
J: Jeff

F: In your book, The Mirror Test, there are 3 mirror tests, with the first one being Proof of Life.  How about for businesses like Google, where they spent years developing in the garage before they ever turned revenue?  Wouldn't they think that they fail the first mirror test?

J: That's the key portion they anticipated that over a period of X number of years they knew they would be losing money before they give up; if they're not meeting their objectives; so that's the key thing in mind - you can still lose money the first couple years - but you need to figure out if you're hitting your set milestones and whether you're generating enough traction.

For entrepreneurs that hang on for way too long - you know when things are goin south and you see the writing on the wall - with enough experience you know when it's time to get out of the business, experience showed me that I can do a lot better than staying with what I was doing.

F: On Leadership - you say that we should fire ourselves from jobs that we aren't good at and focus on our strengths.  This is what small business owner struggle with; we have limited resources that don't allow us to fire ourselves.

J: There's an evolution for small businesses.  You start out as a one man band, doing everything.  You gotta do what you gotta do.  Paint the walls, clean the bathroom.  In the second phase you develop followers that join your business because they believe in what you are doing.  The third phase is where you start adding skilled technicians and experts; this is the step that people don't make the transition to and it kills the business.

To actually transition from the second to the third phase, it is understanding that I don't have all the answers and look beyond just myself for the answer; some people find it hard to do that and they get comfortable.  My belief as a leader, I have to create tension, continue to ask people whether I want to do it this way or that way, more innovative.  Not resting on your behind so to speak.

F: You say that we should get everyone involved in the process, but how realistic is it to show employees our roller coaster cash flows if we're running a start up business?

J: They know it anyways if you don't have money to pay them tomorrow; if that's the case, being transparent that they start seeing that things are coming in on credit.  You're better off having transparency so they can help you speed up collection and make sure you don't make an over commitment to a supplier and vendor.  They know when things are good when the business owner is taking more trips, afternoons off for golf and buying a new Mercedes.

F: I agree that a small business should never compete on price, like what you said "people can go anywhere for price but can't go anywhere for happy".  Can small businesses scale enough to compete on price with the big boys if they initially focus on providing quality?  

J:  I don't think it's possible to do both or even to do a switch strategy - I say you have to pick and choose - stick with one strategy, either high quality or low price.  It's like you're on a seesaw, you pushed down the other way had to give.

F: The story of Mike, your copier technician.  You paid for him and his family to stay at the hotel across from your print shop so you would have access to a technician in the middle of the night.  Looking at this buyer/supplier relationship, do small businesses have to treat our suppliers better because of our lower buyer power?

J: In a lot of cases yeah you can't have the scale of the big boys and you don't have leverage to pull on but there are things you can do better.  You can be more agile than the other guy and you don't have to go through all the steps to make decisions.  For example there was a customer in store A that told store A owner about the low prices offered by the big box competitor.  So store owner A picks up the phone and dials the service line for the big box competitor, only to be put on hold for the duration of his entire conversation with the customer standing in his store.  He then called his own service line, which was picked up immediately - this is a very good way to show how small businesses can be more responsive than the big guys.

F: You like to refer to ROI as Return-on-Ignoring, but even though you're not a huge fan of using tons of performance metrics, you still have to measure something in business right?

I measure 3 key things:
  1. Increase in sales;
  2. Increase in margins;
  3. Increase in customer satisfaction.
These are the three most important things to measure.  I know whether things are working or not just by looking at the bottom line.  You don't need a lot of fancy tools to tell whether it's working or not.  I've worked in companies where they use predictive modeling to see where things are going - I just don't think I need to spend tens of millions of dollars when I can look at the results very quickly with these three metrics.
...then we get to know Jeff

F: You strike me as being high on intuition and your book says that people shouldn't be afraid of a little bit of Ready, Fire, Aim.  Is this a correct view of who you are?

J: Yes - but it's deeply grounded in a lot of experience; I'm shooting from the hip and some people think there's no process behind my madness.  My decisions are based on a lot of what I've been through - it's based on experience.  It's my gut telling me and it's also my head telling me.  To do what I do you have to go out there and TRY doing things yourself, not just go out and learn.

F: What's the biggest mistake you've ever made in business?

J: I think in business we're always going to be making mistake and I think I have yet to make my largest one.  If I'm running an innovative business I want to keep making mistakes because I gain a great deal from them.

F: I read the press release on your resignation from Kodak as their CMO 2 days from now - what's in store for you after this?

J: I am pursuing another book, some television projects, and probably do something more entrepreneurial - I have an idea of what I'm going to do but I'm not ready to announce it.  

F: You like hunting - does that affect the way you do business?

J: There's a soft side to me too.  Some people are just more aggressive than others and it's just more my style.

Thank you Jeff for spending your valauble time with me for this interview and I'm sure all of you reading this interview knows Jeff better now.  I would strongly encourage you to pick up a copy of Jeff's book The Mirror Test if you haven't already.  It is in your face but is a much-needed wake up call for some of us who are getting too comfortable in our business.
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Tuesday, May 25, 2010

Can Superb Service Exist with Scale?

I am sitting here in Timothy's World Coffee at the corner of Bay St and College St. The service is one of the best out of all the coffee shops I've been to, in many different countries including Japan, Hong Kong, Korea, Canada and the US.

The service was friendly, and it looked like the owner was manning the cashier today. They also heated up my sandwich and brought it out for me. I saw other customers come in and the owner recognized them by name and remembered their usual drinks with a side of yogurt. I have to say that my sandwich was just OK but the superb service has definitely made me a repeat customer.  Their offer was $5.99 for the sandwich and it also came with a drink - usually I pay extra for the drink. So I would say this coffee shop also wants to offer their customers good deals (low prices).

Is it possible for companies with hundreds, even thousands or millions of customers to do this on a large scale?  To provide superb service and low prices at the same time?

If I think of companies that are attempting to do this, Flight Centre comes to mind with their travel manager services for small businesses, and I wonder how profitable that is.

As for other larger companies like Dell, their low price offer is based on the fact that there is low to no customer service (they do have Dell Kiosks in some places but limited number) and customers are expected to take care of themselves.  This makes sense, since deliverables should also be adjusted as your revenues go down, you deliver less - in this case, it's lower levels of customer service.

What would happen if one day out of the blue that Timothy's World Coffee generated so much goodwill and word of mouth that their lineup wrapped around the corner?  Will the owner still recognize everybody by name?  Will the staff be bringing out the customers' orders to their tables each and every time?  Will the coffee and blended drinks still taste as good given that they must increase the speed of their operations to decrease wait times?

Most start ups start out focusing on getting great word of mouth going for their businesses by totally babying their customers and I think PeerFX is doing this to a good extent as well - we want our customers to spread the word about our service.  What happens when we suddenly hit a point where word of mouth brings in tons of customers and we can't treat them all the same way we treated our initial group of early adopting customers?  The same way that this coffee shop is running itself based on great customer service and low prices, PeerFX aims to provide a 24/7 service at the best exchange rates for small to medium sized businesses.

Time to start planning ahead!

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Thursday, May 20, 2010

Just Do It

Every moment spent whining, worrying, talking about a problem is one extra moment that you are NOT DOING ANYTHING. So just get off your behind and make things happen!

Rant of the day.

Friday, May 14, 2010

Are You Guilty?

For not doing things you said you would for your business?  For not being your best self everyday?

Here are some key points that would tell you if you are guilty:

  1. You list out your agenda items for the day, don't end up completing them and push some items to next day (huge backlog)
  2. You are busy putting out fires and make up some excuse for not calling a customer/sales lead/advisor/investor/your mom back.  Guess what?  You're not too busy to take a few moments to read this now right?  So you have a few moments to call them back.
  3. You identify the problem and think GREAT! We're halfway there already.  Well, GREAT, you're ONLY halfway there, so get on it!
  4. You offload all the tasks that you don't want to do to your employees.  Hey, I'm not saying that's wrong, because if you're not good at something, I don't want you working in that job either.  Try setting an example though, and try the task yourself - this small thing you do will win the respect of your employees.
  5. You don't put your foot down when you say you would.  You have mistaken the part of being "nice" with your contractors and employees and are now getting pushed around by them. I have to admit it's an art to being firm with and respected by your employees and people you work with.  Or you might be on the other end of the spectrum where people call you nasty names for being bonehead aggressive.
I'm sure that there are many other items that you would come up with upon reflection - now write those down and tell yourself you'll NEVER do that again or else...make sure there's a consequence too or else without a downside you likely won't enforce this on yourself.

Here's my kick in the derriere for myself - I am too involved in the day-to-day of the business and not prioritizing correctly.  Ever had that feeling that you worked 100% but only accomplished 50% of what you intended?  Yup - that's what I feel right now.

I think there could be more structure to my day - it's great that everyday I'm challenged with a new problem and meeting new people, so what I mean is structuring my day so that there are specific time slots for each of these activities.  It seriously does enhance productivity.

I'm starting to understand why people need gatekeepers.  I run a small business and get tons of calls not only from customers, people seeking advice, people wanting to sell me stuff, that it's hard to take all of these calls personally.  Apologies but this is the truth - I still give out my direct contact but chances of me picking up on the first try is slim because I'm either in a meeting, on another call or concentrating on doing what I should be doing - running the business.

Let's face it, there are things I love doing and things I hate doing (I am quite extreme like that).  I tend to push things I hate doing, like endless hours of market research and reviewing 500 pages of our patent to the end of my day, and sometimes I push it to next day - GUILTY.  I'm going to stop doing that.  I'm going to stick to the schedule down to the minute and make sure I leave some time at the end of my day to put out fires - deal?  Yes, deal.

This is my shortlist of things I do that is hindering my productivity right now and that I am promising myself to change.  What are yours?
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Wednesday, May 12, 2010

What People THINK They Want

I find it funny - that most people perceive an office with tons of people bustling around to be a sign of stability, efficiency and hard work. 

Contrary to this belief, most of the time these offices are overstaffed, people are looking busy on Facebook and expensing their friend's dinner gathering on the company's tab :)

What's the problem with having a small staff base if things are functioning fine?  Do I really need a CTO, CFO, CMO, CXO, etc. to make it look like we are a credible company?  Sure, I can add an admin person and more salespeople to generate more sales...but then you want me to maintain a store front and incur additional fixed expenses when that isn't your real objection to not signing up - you actually want better prices, faster turnarounds, freebies, insurance, blah blah blah.  Yes. What you are telling us with words really don't match your actions.  If I gave you what you really wanted (if you were kind enough to let us know) then you would buy the service/product; but why throw false objections our way when it doesn't solve the problem? 

Which brings us to how good is traditional market research?  Where we ask people what they want?  Are they really telling us the truth or telling us some BS reason that they know isn't the real reason why they're not putting money where their mouth is. 

I did some work in traditional market research before and now after having run my own business for a 2 years I think these methods need to be modified to reveal the real truth.  Just take for example when we did our initial primary survey, all these students and travelers told us they would buy the service; when we launched we got small businesses and self employed individuals swarming us.  I would say almost zero correlation between the results we got through primary research and actual purchase behavior.


Tuesday, May 11, 2010

PeerFX Webinar Series - Successful Online Marketing for Small Businesses

Today's webinar was a great success and we actually went overtime with questions from our audience. Definitely check out the presentation if you weren't able to attend!

Thursday, May 6, 2010

PeerFX Webinar Series - Successful Online Marketing for Small Businesses

Since you guys liked the first webinar we decided to share more ideas with you through our webinar series - this time it's will be on successful online marketing for small businesses.

Most people don't know where to start since there are 500 different tools they can use to measure different things such as website traffic.  Where should you put your money so that it generates the best returns for you?  What type of content should you be writing so that people actually bother reading?

That's what we're going to tell you and you will get your chance to ask questions to our online marketing and SEO specialist Damon Holowchak.  Damon has generated tens of thousands of hits for budding businesses and increased web traffic to millions of hits for growing companies in industries such as sports betting and news. 

Register for your seat today - right here!
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Monday, May 3, 2010

PeerFX HR Article on Manitoba Chambers of Commerce

As a teaser for our upcoming webinar tomorrow, we have put together an HR article that goes over 4 key questions for small businesses and of course included the answers from Raymond To, Founder and managing partner at Go Recruitment. 

If you haven't signed up for our webinar tomorrow yet now is your chance!  RSVP by emailing!  Our next webinar will be on online marketing for small businesses on May 10th. 

The full HR article is here.  Enjoy!
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