School's out next week and the kids are demanding attention.
So Selling to Small Business is going into reruns till March 21.
How do reruns work? Simple. You scroll down and read the posts you haven't seen before.
As always, send your comments or suggestions to rick (a) rickspence.ca
And if you have time, check out our links to the left. Lots of good learning there.
Rick
Thursday, 9 March 2006
Segmenting your market
What keeps entrepreneurs awake at night?
Before answering that question, you have to know which part of the small business market you're targeting. It's Marketing 101: this market is so huge and so variegated that anything you can do to segment your preferred audience (young entreprenurs, female business owners, manufacturers, startups in Manitoba, etc.) will result in finer targeting and produce better results.
Case in point: A January 2006 Industry Canada study of financing for young entrepreneurs.
Here are the "Perceived Obstacles to Business Growth and Development" identified by the study. As you will see, it found significant differences between young entrepreneurs and older ones.
Problems Facing Young Entrepreneurs
Finding Qualified Labour: 40%
Obtaining Financing: 39%
Instability of Demand: 25%
Levels of Taxation: 23%
Low Profitability: 19%
Government Regulations: 19%
Equipment Renewal: 13%
Managerial Skills: 11%
Problems Facing Older Business Owners
Levels of Taxation: 40%
Finding Qualified Labour: 38%
Low Profitability: 34%
Instability of Demand: 33%
Government Regulations: 29%
Obtaining Financing: 23%
Equipment Renewal: 17%
Managerial Skills: 6%
If you're targeting younger entrepreneurs, for instance, you wouldn't worry so much about taxation or high taxes. You might, however, focus on financing solutions. One thing is clear: both demographics are equally concerned about finding good help.
Why do young entrepreneurs matter? Well, apart fom the possibility of them being good customers for the next 30 yars or so, they are stepping up to the plate now and starting or buying businsses as more and more baby-boomer entrepreneurs look for a change or outright retirement. This is a market you need to know.
Before answering that question, you have to know which part of the small business market you're targeting. It's Marketing 101: this market is so huge and so variegated that anything you can do to segment your preferred audience (young entreprenurs, female business owners, manufacturers, startups in Manitoba, etc.) will result in finer targeting and produce better results.
Case in point: A January 2006 Industry Canada study of financing for young entrepreneurs.
Here are the "Perceived Obstacles to Business Growth and Development" identified by the study. As you will see, it found significant differences between young entrepreneurs and older ones.
Problems Facing Young Entrepreneurs
Finding Qualified Labour: 40%
Obtaining Financing: 39%
Instability of Demand: 25%
Levels of Taxation: 23%
Low Profitability: 19%
Government Regulations: 19%
Equipment Renewal: 13%
Managerial Skills: 11%
Problems Facing Older Business Owners
Levels of Taxation: 40%
Finding Qualified Labour: 38%
Low Profitability: 34%
Instability of Demand: 33%
Government Regulations: 29%
Obtaining Financing: 23%
Equipment Renewal: 17%
Managerial Skills: 6%
If you're targeting younger entrepreneurs, for instance, you wouldn't worry so much about taxation or high taxes. You might, however, focus on financing solutions. One thing is clear: both demographics are equally concerned about finding good help.
Why do young entrepreneurs matter? Well, apart fom the possibility of them being good customers for the next 30 yars or so, they are stepping up to the plate now and starting or buying businsses as more and more baby-boomer entrepreneurs look for a change or outright retirement. This is a market you need to know.
Sunday, 5 March 2006
How tech fails medium-sized business
Does the tech industry understand the medium-sized business market? Not according to Dan Mclean, editor-in-chief of ITWorldCanada.com, in a story published March 2 in The Globe & Mail.
“When it comes to information technology designed to suit their specific computing needs, mid-sized companies in Canada are on the outside looking in,” Mclean writes.
When businesses with between 100 and 499 employees look for tech solutions, what do they find? “These days they're typically scaled-down versions of large-business IT hardware, software and services, or scaled-up small-business products,” he writes.
The problem, says analyst John Sloan of Info-Tech in London, Ont., is that the IT needs of a mid-sized company can be every bit as complex as those of a much larger firm. But they have fewer people to support and manage it. That means mid-sized firms need products that have big-business function at a small-business price.
According to Sloan, two-thirds of a mid-sized business’s IT spending goes to maintenance and management. Anything that reduces the need for operational support “is likely to get a good hard look by a medium-sized business customer. Gains in efficiency and productivity are golden for customers in the mid-market.”
Medium-sized businesses are big IT spenders. On average, says Mclean, they spend more than $1 million a year on IT.
Lise Dellazizzo, VP of IT for Ipsos Reid Corp., calls medium business "the most significant revenue-generating engine in Canada when it comes to IT spending." Large businesses may spend more per capita, but the mid-sized market has greater volume. Canada has nearly seven times as many mid-sized companies as large companies.
As Mclean concludes, this is a market worth figuring out.
See the original story (until it slips behind the pay curtain) here.
“When it comes to information technology designed to suit their specific computing needs, mid-sized companies in Canada are on the outside looking in,” Mclean writes.
When businesses with between 100 and 499 employees look for tech solutions, what do they find? “These days they're typically scaled-down versions of large-business IT hardware, software and services, or scaled-up small-business products,” he writes.
The problem, says analyst John Sloan of Info-Tech in London, Ont., is that the IT needs of a mid-sized company can be every bit as complex as those of a much larger firm. But they have fewer people to support and manage it. That means mid-sized firms need products that have big-business function at a small-business price.
According to Sloan, two-thirds of a mid-sized business’s IT spending goes to maintenance and management. Anything that reduces the need for operational support “is likely to get a good hard look by a medium-sized business customer. Gains in efficiency and productivity are golden for customers in the mid-market.”
Medium-sized businesses are big IT spenders. On average, says Mclean, they spend more than $1 million a year on IT.
Lise Dellazizzo, VP of IT for Ipsos Reid Corp., calls medium business "the most significant revenue-generating engine in Canada when it comes to IT spending." Large businesses may spend more per capita, but the mid-sized market has greater volume. Canada has nearly seven times as many mid-sized companies as large companies.
As Mclean concludes, this is a market worth figuring out.
See the original story (until it slips behind the pay curtain) here.
Wednesday, 1 March 2006
The long drawn-out agony of giving up control
One of the big problems facing entrepreneurs is control.
When they found their business, entrepreneurs are in complete control. They have to be: they can't allow a free-thinking employee or supplier to undermine thier vision or the standards they are trying to create.
Some people dismiss entrepreneurs as “control freaks,” but they are this way for good reason. Just as a watchful she-bear will fight for her cubs, entrepreneur will take few chances that would endanger their business. When you take your eye off the business, danger is always close by.
(Recall 15 years ago when Magna founder Frank Stronach started dabbling in restaurants and politics -- his auto-parts company started to crumble. It was only when Frank returned to put his personal stamp on the business again that it recovered.)
Over time, then, entrepreneurs must battle hard to find systems that allow them to give up control without sacrificing quality, standards or culture.
In an article written a few years ago for PROFIT Magazine’s website, Markham, Ont. entrepreneur Aaron Moscoe, co-founder of a corporate-giftware firm called The Promotional Specialists, described his efforts to let go. Here are a few excerpts that speak to the difficulty of letting go – and the incredible opportunity that creates for suppliers and other potential partners who can win an entrepreneur’s trust.
"Having built this business personally, [my partner and I] like to have things done our way - and who better to do it exactly that way than ourselves? The problem is that there are too many accounts to manage to allow us the time to plan and manage our business properly. Like many small business entrepreneurs we have tried to just work harder. After a while you learn that there is not too much of this or that, but too few of you.
"Hiring others to do jobs that you handled previously is tough because it means relinquishing some control. (Rick’s note: the suggestion here is that relinquishing control is bad. I am sure Aaron has gotten over that notion now, and recognized that delegating is an essential skill – but it’s a hard concept for many to accept]. While you can train employees, you also need to trust them and to realize the various ways they can add value to your business, even if it is by doing things differently.
"Perhaps the most important way to grow is to realize that you must inevitably rely on others. Whether employees, suppliers, couriers, financiers, or key clients, it is dramatically important to choose those strategic partners carefully.”
You can read the rest of the story here, but here's the main point: When you sell services to entrepreneurs, they may be cautious, skeptical, even hostile, because they are being asked to entrust their business to your systems, your standards.
Once you recognize that pitching your product is much like asking new parents to entrust your baby to their care, you will better understand that your primary job is not to sell your services to entrepreneurs, but to win their trust. If you can do that, the rest gets much easier.
There are no quick wins in this market. As Moscoe concludes, “Partnerships must be mutually beneficial in the long run if they are to last. Accordingly, it is crucial to work with partners who value the contribution that your partnership brings to them.”
If you're listening, that's the sound of an entrepreneur demanding respect.
When they found their business, entrepreneurs are in complete control. They have to be: they can't allow a free-thinking employee or supplier to undermine thier vision or the standards they are trying to create.
Some people dismiss entrepreneurs as “control freaks,” but they are this way for good reason. Just as a watchful she-bear will fight for her cubs, entrepreneur will take few chances that would endanger their business. When you take your eye off the business, danger is always close by.
(Recall 15 years ago when Magna founder Frank Stronach started dabbling in restaurants and politics -- his auto-parts company started to crumble. It was only when Frank returned to put his personal stamp on the business again that it recovered.)
Over time, then, entrepreneurs must battle hard to find systems that allow them to give up control without sacrificing quality, standards or culture.
In an article written a few years ago for PROFIT Magazine’s website, Markham, Ont. entrepreneur Aaron Moscoe, co-founder of a corporate-giftware firm called The Promotional Specialists, described his efforts to let go. Here are a few excerpts that speak to the difficulty of letting go – and the incredible opportunity that creates for suppliers and other potential partners who can win an entrepreneur’s trust.
"Having built this business personally, [my partner and I] like to have things done our way - and who better to do it exactly that way than ourselves? The problem is that there are too many accounts to manage to allow us the time to plan and manage our business properly. Like many small business entrepreneurs we have tried to just work harder. After a while you learn that there is not too much of this or that, but too few of you.
"Hiring others to do jobs that you handled previously is tough because it means relinquishing some control. (Rick’s note: the suggestion here is that relinquishing control is bad. I am sure Aaron has gotten over that notion now, and recognized that delegating is an essential skill – but it’s a hard concept for many to accept]. While you can train employees, you also need to trust them and to realize the various ways they can add value to your business, even if it is by doing things differently.
"Perhaps the most important way to grow is to realize that you must inevitably rely on others. Whether employees, suppliers, couriers, financiers, or key clients, it is dramatically important to choose those strategic partners carefully.”
You can read the rest of the story here, but here's the main point: When you sell services to entrepreneurs, they may be cautious, skeptical, even hostile, because they are being asked to entrust their business to your systems, your standards.
Once you recognize that pitching your product is much like asking new parents to entrust your baby to their care, you will better understand that your primary job is not to sell your services to entrepreneurs, but to win their trust. If you can do that, the rest gets much easier.
There are no quick wins in this market. As Moscoe concludes, “Partnerships must be mutually beneficial in the long run if they are to last. Accordingly, it is crucial to work with partners who value the contribution that your partnership brings to them.”
If you're listening, that's the sound of an entrepreneur demanding respect.
Monday, 27 February 2006
Countdown to Report on Small Business
The Globe and Mail plans to publish four issues of its new magazine, Report on Small Business, this year. (I think there were just two last year.)
I have concerns about the title (see previous post), but if you’re interested, there's still time to get in on the first issue. The ad deadline for the April 12 issue is March 7.
Here are the rest of the dates this year (cribbed from the Globe’s site here)
Issue date: June 22 Sales close: May 11
Issue date: Sept. 26 Sales close: Aug. 11
Issue date: Nov. 22 Sales close: Oct. 20
Curiously, the Globe’s website doesn't have much information on this new publication. (They also still refer to it as a “special report” rather than an ongoing magazine.) The editor is Noel Hulsman, a marathon runner who was formerly editor of BC Business.
I have concerns about the title (see previous post), but if you’re interested, there's still time to get in on the first issue. The ad deadline for the April 12 issue is March 7.
Here are the rest of the dates this year (cribbed from the Globe’s site here)
Issue date: June 22 Sales close: May 11
Issue date: Sept. 26 Sales close: Aug. 11
Issue date: Nov. 22 Sales close: Oct. 20
Curiously, the Globe’s website doesn't have much information on this new publication. (They also still refer to it as a “special report” rather than an ongoing magazine.) The editor is Noel Hulsman, a marathon runner who was formerly editor of BC Business.
Friday, 24 February 2006
Small is Beautiful. Powerful, too
Why should you care about Selling to Small Business? Because small and medium-sized businesses are an important growing force.
According to the government of Canada:
* Small businesses are much more adaptable and adopt new technologies and processes more quickly than large firms
* Businesses with fewer than 50 employees account for 95% of all companies in Canada.
* SMEs generated 43% of Canada’s private sector GDP in 1998.
* The number of self-employed Canadians has nearly doubled since 1980, to 2.4 million.
* In 2002, small businesses (under 100 employees) accounted for 20% of Canada’s total exports.
As they say, there is nothing small about small business.
Feel free to leave a comment or e-mail me if you want more information on any of these factoids.
According to the government of Canada:
* Small businesses are much more adaptable and adopt new technologies and processes more quickly than large firms
* Businesses with fewer than 50 employees account for 95% of all companies in Canada.
* SMEs generated 43% of Canada’s private sector GDP in 1998.
* The number of self-employed Canadians has nearly doubled since 1980, to 2.4 million.
* In 2002, small businesses (under 100 employees) accounted for 20% of Canada’s total exports.
As they say, there is nothing small about small business.
Feel free to leave a comment or e-mail me if you want more information on any of these factoids.
Sunday, 19 February 2006
A bad ad that redeems itself beautifully
So, what are the results of “Results-Driven Advice?”Looks to me like you’re left tottering uncertainly, facing almost certain ruin if you tip back even a bit.
But according to this ad from Grant Thornton in the latest issue of PROFIT Magazine, what this picture represents is “Perfect balance… achieved through working hard, having fun and always giving great client service.”
Maybe. But to me balance is a chair with four feet on the ground, not two.
The other problem with this ad is the incredibly tenuous link to the client benefit. The image and the “balance” theme have nothing to do with Grant Thornton.
The payoff line is this: “The financial advisory service that fits us? Grant Thornton. Their insights and guidance help us sit pretty and considering we’re in the office furniture business, that's a very good thing.”
The key, then, is the incredibly lame pun about “sitting pretty.”
One more problem: While it’s a so
und idea to use real entrepreneurs and their testimonials in ads (because entrepreneurs only really trust each other), you need to follow through. For instance, while Jim Mills (pictured above) and his company, Office Interiors, seem to be real (and Halifax-based, no less), the URL they provide, www.officeinteriors.ca/, isn’t working. Here is the screen that URL served up on Sunday night.(Monday night update: The company's website was back in business when I checked again tonight.)
So what redeems this ad? Grant Thornton’s respect for its entrepreneurial prospect – and his or her ego. The action step in the lower text box is to call or e-mail GT’s CEO, Alex MacBeath, through a toll-free number or what appears to be his actual e-mail address.
This is classy. We’re not sending you to a website or an $8-an-hour call centre clerk. Speak to the boss, CEO to CEO. Because you’re worth it.
I bet that’ll do more to make the phone ring than the smug guy in the unsafe stool.
YOUR TAKEAWAY: Treat entrepreneurial clients as important individuals. Because in their world, they're the boss. And they expect to be treated as such.
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