Having a Board of Directors or Advisory Committee

No one knows everything. No one has all of the best ideas. Everyone needs help, suggestions and advice. So are you getting the help from others that you need?

I am a strong believer that getting help, suggestions and advice from others is a great asset for business owners. Unfortunately, many just want to "go it alone." I don't know why. Maybe they consider it a sign of weakness. Maybe they don't know who or how to ask for help. (See http://www.squidoo.com/businesshelper) . Maybe they think others just don't understand their business or problems.

No matter who you are or what business you are in, you don't have all of the answers. You don't have all of the best ideas. Others can help you.

Having a board of directors or an unofficial advisory committee can be a great way of getting ideas, suggestions and advice for your business. The key, of course, is choosing the right people. Let me start with the "Don't List."

Don't put people on the board or committee that work for you. If you are signing someone's paycheck and giving them orders on a daily basis, it is highly unlikely that they are going to disagree with you. Do you really think they will say, "That's the dumbest idea I have ever heard?" ....... and sometimes you may need to hear that !!!!

Don't put your attorney, CPA and insurance agent on the board or committee. You already have access to them. You already get their advice and opinions in their areas of expertise.

Don't put close family members on the board or committee. A personal disagreement can easily carry over to business meetings or a business disagreement can carry over to Sunday dinner.

If your business has sales of $250,000 per year, don't select someone who has only worked for a multi-billion dollar corporation. They can't relate to your business. I have seen these types of individuals try to start small businesses after retiring and fail miserably. If you want specific examples, email me at ron@sentrabusinesssolutions.com and I'll be happy to share a few with you.

The "Do List" is quite simple. Do select individuals that have business experience (6 or more years) with a business of your size (regardless of product or industry) and are willing to share their knowledge. What's magic about six years? A great majority of businesses never last to year six. If they make it that long, they are doing lots of things correctly.

Here are a few "extras." If you can select people who do not know each other, that is best. If four of the people you select play golf together every week, they probably aren't likely to disagree with each other. Try to select at least a few who are well-known in the community. This can be an extra help for your business. I am sometimes asked if picking a well-known sports person or other type of celebrity is okay even if they don't know business. The answer is "Yes," if they are an extra person and they know that their responsibility is to bring attention to your business. In other words, if you want seven people on a board, make the celebrity number eight. They can be a help for getting attention to your business. If you are choosing them just to brag that they are on your board, forget it. You are wasting a spot.

Those are my thoughts. If you have other suggestions, I would like to hear them. Please feel free to comment.

Keep Learning About Business And Get Good Advice

Do you have 10 years of experience or one year of experience 10 times? Are you improving your business skills every month or are you doing the same old things and expecting better results?

I had a teacher in ninth grade that bragged about his "30 years of teaching experience." The truth was that he had one year of experience and used it 30 times. Each year he gave the same lectures and the same tests. Students knew what was going to be on his tests simply by asking those who had his class in any of the previous years.

I see many business people operating the same way. They develop one process or one marketing program or one service and use it year after year after year. I am not saying to abandon something that works just for the sake of change. I am saying that you need to make sure you don't fall into a rut or comfort zone and forget to analyze what you should be doing.

Examine .... learn .... talk to other business owners ..... read .... question .... talk to customers .... analyze .... think .... ask .... discuss with employees ............................ NEVER STOP LEARNING.

All of the above are ways to learn. There is no one right way. There are many ways. Choose the ones that suit you best. I like to read business books, blogs and any business articles I can find. I also like to meet regularly with other business people to discuss problems and opportunities, and to exchange ideas. I like to have periodic, formal brainstorming sessions. I believe that a board of directors or an advisory committee can be a great help. (I'll discuss both in detail in my next posting). Other methods may work better for you.

The point is that you can't let yourself and your business become stagnant. You have to keep learning and moving ahead. If you stop learning, your competitors will pass you by.

Work hard on improving your management and business skills. Get your ego out of the way. Don't be afraid to say, "I can learn more. I can get better." I have referred to ego in other postings. I believe that ego, greed and jealousy are three of your worst enemies. I am 61 years old and I learn from people older than me AND PEOPLE YOUNGER THAN ME. I learn from people with more experience and from people with less experience. Everyone can teach me something.

Think about how you learn best. Think about what will improve your business skills ..... and DO IT NOW !!!!!!!

Do You Differentiate Your Business ???

If I ask you, "How are you different from your competitors," what would you say? Would your answer be really specific? Would you tell me something unique? ....... or would I get the usual general statements like, "We give really great service" or "Our product quality is really good."

Successful businesses know how to differentiate themselves from their competitors. It is not just important to do that - IT IS MANDATORY !!!!! First, you must give your potential customers a reason to notice you and secondly, you must give them a reason to become customers and buy from you.

In your strategic planning, you must do two important things. First, determine what your niche is. What are you going to be? Don't try to be all things to all people. For example, let me take it to an extreme. Do you think consumers are going to buy high-fashion, expensive clothing at the same store where they buy dishwashers and refrigerators? (Believe it or not, one well-known retailer thought so in the 1970s. It didn't work.) If you are going to be an appliance store, do you want to sell large appliances like refrigerators or do you want to specialize in small appliances like toasters and irons? Are you going to specialize in upper-end expensive appliances or lower end moderately-priced appliances? Are you going to sell to builders or to the general public? FIND A NICHE AND DOMINATE IT.

Once you determine what your niche will be, the second important area of your strategic plan should be to answer the question, "How do I differentiate myself from my competitors who are going after the same niche?" Let me repeat what I said before. You must give potential customers a reason to notice you and then become customers and buy from you.

If you sell appliances, you may differentiate yourself by giving a special warranty in addition to what the manufacturer offers. You may offer a special preventative maintenance service. You may decide to guarantee that when you are called for service, you will arrive at a specific time rather than within a two to four hour range as most service people do.

Just use your imagination. Ask yourself, "What don't my competitors do?" Survey your customers. Ask them what they would like that no one is currently providing. Yes, it may increase your cost but that cost will be insignificant compared to the extra sales it will create.

Once you know how you are going to differentiate yourself from your competitors, you need to emphasise the difference in all of your marketing. It is useless to be different if no one knows it. Make those differences a featured part of advertising campaigns.

Remember, if consumers do not have a reason to buy from you and to choose your business over your competitors, they are just as likely to buy from someone else.

Thanks for visiting The Business Adviser. I welcome your opinions on the subject. Please feel free to comment.

Managing a Small Business vs. Managing a Big Business

So what's the difference? Does the size of the business really determine how you manage? In the true sense of the word "management," the answer most managers would give is "NO." ....... BUT ......... there are major differences in being a manager in a small business versus being a manager in a large business.

My first job after graduating from college was for a large corporation. At the time (June 14, 1969), it was in the top 20 on the Fortune 500 list. During my 14 years there, I held management positions in marketing, manufacturing, IT, and materials. Since 1983, I have owned my own businesses. The largest employed about 100 people. Is there a difference? YOU BETCHA !!!!!

There are two major differences. The first is cash. In a large corporation, managers talk about profit and loss. When I worked for the large corporation I never even talked about cash, let alone saw a check or dollar bill. Money for paying our bills was "magically" available when we needed it. I am not sure anyone even knew where it came from. After all, money was received at some unknown location and was disbursed from some unknown location. We just sent requests for bills to be paid. And all employees got paid on time.

With a small business, CASH IS KING. You don't pay bills or meet the payroll with profit. You do it with CASH. Unlike the large corporation where you wait until the end of each month to learn what your profit is, you must know the cash position daily at the small business. Many small businesses have closed their doors with a P&L statement showing a profit but no cash in the bank. If you don't manage cash well, you will not survive.

The second major difference is that a manager in a large corporation is a specialist and a manager in a small business is a generalist. Small businesses can not afford specialists. Most managers must wear many hats and be KNOWLEDGEABLE in many areas.

Instead of hiring people (who need to be managed) to perform all required services, smart small businesses will outsource as much as possible in order to save money. Often payroll and accounting will be done on a contract basis. An HR firm may be consulted when special information is needed or recruiting companies may be used when hiring needs to be done.

Yes, there are other differences but in my experience, these are the two main ones. Yes, the "principles of management" may be the same but "managing" is different.

If you have had different experiences, I would like to hear from you. Please feel free to comment.