Commentary: The small business paradox

Filed under: Entrepreneurism,high tech |

Among the many reasons budding entrepreneurs start their small businesses is to gain a level of control over their product or service that can’t be found in the larger corporate environment, and to generate financial independence and schedule flexibility. Once the new venture begins to gain success, the paradox introduces itself. The challenge of managing a growing prospect pool, servicing a growing client base, meeting the needs of employees, managing suppliers and the administration of a business become all-consuming; before you know it, you are not focusing as much as you would like on the very things that set you apart from the competition in the first place: your customers, product or service.
Among the chief culprits that steal your time is the introduction of manual and/or redundant processes to manage your business. How often have you selected multiple packages of effective, inexpensive off-the-shelf software only to find that when you add up the expense, and the amount of time you spend entering essentially the same information into each of the applications, that you wonder what you could have done for the same money and allowed yourself to focus more on your customers? This is where having a professional process management firm come in and review your technology and processes pays big dividends.
These firms have a variety of approaches to small business challenges. The first step a professional firm should take, regardless of how long you’ve been in business, is to sit down with the principals of the company and determine answers to the following questions:
1. What uniquely sets your company apart in the eyes of its customers?
2. How are customers acquired and retained?
3. How are the most and least valuable customers identified?
4. What are the various channels used to communicate with each type of customer?
These questions are centered on one common axiom: The customer is at the pinnacle of your organization.
Inevitably, business owners have a good sense of the answers, but they likely have limited technology or documented processes in place to analyze emerging trends that will affect the equity their business has in properly managing customer relationships. Ironically, many dollars may be spent on customer acquisition techniques: advertising, promotions, commissioned sales, etc., but little time or energy is spent on tracking the effectiveness of these activities.
The next steps are dependent on the maturity of the company’s customer base and the level of technical investment already made:
New Businesses
Obviously, the best position to be in is to address customer information management as early in the life of the business as possible. Sales Force Automation (SFA), customer service and Customer Relationship Management (CRM) tools are critical elements in helping the small businessperson record and track interactions their existing and prospective customers have with the business.
The ideal approach allows for the determination of the answers to the questions above, then establish processes to support the business’ mission, then select the technical infrastructure that will support those processes. This includes phone service, mobile service, PDA’s, network, web-hosting, website development and maintenance, and business application software.
Too often decisions are made from a transactional mindset, finding the seemingly least expensive technology that provides promises of tremendous functionality. Immediately, the small business may find the solution doesn’t quite fit the way they want the business to function. But, with a small adjustment to their preferred processes, the solution will work. Some weeks later an additional decision must be made on other technology; this solution may not integrate well with existing decisions, but with another undesirable, yet small change to the business process, the newest technology purchase will also work.
Before you know it there is a patchwork of non-integrated solutions providing very little of the desired functionality. The resulting manual processes necessary to override the shortcomings of the “solutions” take an inordinate amount of time and energy away from customer focus.
This scenario provides the mandate for why establishing processes upfront is the key to avoiding long-term headaches and securing business growth.
Existing Businesses
Many businesses begin to address the challenges of understanding the information they have gained about their customers after significant investments in technology have already been made. While this is not the most ideal situation, it is also not an indication to panic. Here too, some firms can deliver substantial value to the small businessperson.
One firm’s approach in this situation may be to visit the business for a few days and perform the equivalent of an annual physical check up by interviewing key stakeholders, reviewing all existing processes, customer management initiatives and technology. The published results of this check-up will serve as the road map for the small business on what steps to take, the time frames and the expense to get the business on the most effective course. The key here is that the time and money to have these initiatives identified and implemented will generate higher profits through the efficient use of technology, reduction or avoidance of expense and most importantly, help the company focus their sales and service strategy on customer relationships that, in turn, drive profit and growth.
Finally, the small business owner needs to be able to acknowledge that the same inspiration and perspiration that makes their product or service special and available to the marketplace may not equally permit them to navigate through the myriad of decisions and processes that give rise to the paradox. Instead, the right thing to do may be to make a phone call and ask, “Can you help me?”
Douglas Klein
Tech Link