Market Research Lessons from the Czech Republic

I read a good article today in the International Journal of Management Cases, you can find the complete article here http://ijmc.org/IJMC/Vol_16.4.html . If you want to read about the methodology and actual research study more in depth please visit the site. The authors basically surveyed Czech Republic small businesses to determine what did they consider to be barriers to exporting and what are the actual barriers to exporting based on data. They found that many small business believe that the following are their main barriers:

1. Lack of language skills
2. Lack of experience with foreign markets
3. High costs of promotion
4. Lack of public support
5. Lack of information about foreign markets

The findings suggest that the main barrier to exporting is actually:

1. Lack of information or experience in foreign markets.

Those companies that either searched for information about foreign markets or had key employees with experience in foreign markets actually had decent volumes of export sales (as a ratio of total sales). Although the first list is intuitive and i think almost every business owner that has not exported will list the same reasons, I wonder if small business owners in the US have the exact same concerns?

Thoughts.

Small business valuation

I read an intetesting piece on small business valuations today. It was mainly focused on Succession planning and how valuations are essential at the time of selling or transition the business to new owners. This is a very essential service for SMEs yet its in short supply. Maybe a possible business opportunity?

Financial tools for SME

What financial tools do you use in your small business? I have mostly stuck with either Quicken or QuickBooks.  I must say that after going thru numerous versions of both software packages the differences are starting to blur.Yes, Quickbooks is better for invoicing and P/L reports but Quicken is not far behind in the reporting arena and frankly even Excel can create fairly decent invoices. My point is that Small Busineses might have to start thinking about these tools, and their characteristics,  as commoditized.  Having them will not give your company a competitive advantage, its just the price to pay to stay competitive.

New Year's resolutions

The year is almost over. Hopefully it was a succesful year for your business but maybe it was not. During this time of the year just like we usually take stock of our lives its a good idea to take a look at how your business is performing. Many consultants recommend doing this often, however I tend to recommend to do this at least twice a year, but no more. We have to give time for our ideas to be Implememted, take hold and yield results If any. Take some time to ask yourself some of the following questions:

1. What have you failed at this year? Its easy to think of the successes,  its a bit harder to acknowledge mistakes. Think about those things that didnt go quite as planned.

2. Did your customer base increase or decrease? This is a fact that will tell you whether you are providing the right products to the right customers. Think about your offerings and what is working or not.

3. How do your employees think the business is doing? This is not a one man operarion, seek the input of others. If you think everything is going great but when you ask your employees its all doom and gloom then there is something wrong and they might be on to something that you missed entirely.

4. Am I focusing on the customer or my profits? There is one right answer to this one, you should know which one it is.

What do you think? How are you reshaping your business for 2014?

Look forward to your comments.

Challenges in Small Businesses

Recently I have noticed that some fellow small business owners are finding some new regulations challenging. Whether it be grappling with the new health care law or trying to figure out how to charge taxes on online sales, new regulations are continually forcing owners to adapt. This is not necessarily bad as it forces some sort of "survival of the fittest", or  "creative destruction" via Schumpeter, however doing so by imposing more regulations is hardly ideal. As a small business owner below are some tips that you can use to stay informed:

1. Be "involved" with your area chamber of commerce. Now this is different from joining, which usually involves a fee. Joining the Chamber of Commerce is not for every owner, but selecting a few chamber of commerce functions a year and paying the non member rate to attend will allow you to get some insights into what the business community in your area is facing. Listening in these functions is key!

2. Stop by City/County Council meetings at least once a quarter. These governmental bodies are notoriously slow, you dot have to be there for every meeting, it usually takes them months to get anything done. Go once a quarter and see what issues they are discussing.

3. Talk to your business partners and customers. If you have suppliers talk to them about their issues and how business is going. Talk to your customers about their issues. Most importantly listen. Their issues will ultimately affect your business. I am not talking about long conversations (although if you want to have those go ahead) but 2 or 3 minutes here and there with a big enough sample might help you make generalizations about your business environment.

The point here is that in order to adapt you must identify the problem and in order to do so you must listen! These are just different venues to arrive at the same conclusion. Listening will give you an edge on what the problems are now, what problems might arise and how to tackle them. 

I look forward to your comments.

GSA Schedules and GWACs

So you are looking for business. Your company is growing but you are looking for potential markets. What about the Federal Government? With sequestration the time might not seem the best to pursue this work but that is not the case, with the increasing number set aside contracts it is a potential huge market for any small business.

GSA Schedules creates "vehicles" for Federal agencies to procure products and services. In simple term, these are contracts which Small Businesses could potentially bid on in order to provide their services/products to federal agencies. GSA Schedules, and their IT counterparts the GWACs, make it easy for those agencies to procure those services/products. If these vehicles make it easier for those agencies to order from the contract holders then it behooves small business to be one of those contract holders.

Additionally the GSA has generously created programs for small businesses to have an ADVANTAGE over other when bidding for these contracts, from 8(a) to Service Disabled Veteran Owned Small businesses.

So what do you need to know. You can visit the GSA website,www.gsa.gov , and get knowledgeable on what the schedules are and how they operate, you can visit the Internet for many providers of this service or you can visit our website at www.ilesportatore.com and purchase one of our short and simple guides on the subject. Whatever you do, make sure you take advantage of this opportunity.

Look forward to your comments,
Juan

How do you do it? Finding Buyers II

Last post we quickly went over how to locate a place and a specific potential buyer for your products/distributor. This example was rather quick, however repeating it will yield numerous locations and numerous potential buyers/distributors. What do you do now?

     The first step is to limit your choices. Yes, its possible that you could sell your products to a buyer/distributor in New York or China but it might be easier to negotiate with a distributor that's close to you. In this business face to face interactions, and establishing trust, is essential as methods of payment can vary widely. I have found that narrowing your selections to between 3 and 5 is a good start. At least one of these should be local or driving distance from your location.

     Second you must research the terms that some of these buyers/distributors are offering. Are they asking for exclusivity? Will they buy from you to keep inventory or just-in-time? In the blueberries example that I used on the previous blog some questions to ask is if the distributor buying my entire crop? If so at what price per pound? What happens if the market price fluctuates? What are my responsibilities in getting the crop to the distributor? Is this a multi-year or yearly contract? The list can go on and on but you get the picture, drill into the details. Many buyers/distributors are shrewd negotiators but these are questions that any sales manager should easily answer. Be smart about creating a deal that is beneficial to both parties.

     Finally, this is a continuous process. Just because you close a deal with a buyer or distributor does not mean that your job is done. Immediately start looking for other buyers or distributors. This is key for two reasons; first terms always change and so does the market. If you wait until you have lost a buyer to find another one your bargaining position is not quite as strong. Second, this allows you to focus on your scaling. How many buyers/distributors I can supply? How may do I want to supply? Knowing where your business is and how do you want to scale it is key to having a successful business. As always I look forward to your comments.