It is a fact that small business generates most of the jobs in this country. We need local small business to grow our economy. I had the opportunity today to address a group of small businesses in Westchester County New York.
I’m certain you’ll agree that at best, today’s business environment can seem somewhat volatile. Many pressures have been added to small business by competition from larger national organizations such as big box stores.
While I don’t want to oversimplify I believe that small business must pay full attention to the three steps below if they wish to remain sustainable.
Step 1 – Strategic thinking – Planning and Deciding
Strategic thinking means working ON your business rather than IN your business. It includes planning and deciding where you want to take your business now and in the future whether it is in 5 years, 10 years, 15 years or more. You must determine who your customers are now and whether they will be the same in the future. You must plan for changes in customer needs so that you will continue to meet them.
You need financial controls with budgets for sales, inventory, gross profit, employee expenses, fixed expenses and net profit? Be prepared to alter other parts of the budget when results change.
You should have the right number of people doing the right things. You should have qualified people but you should also be flexible as business changes and you should consider cross training and employee development since you will have turnover.
Processes throughout your entire business operation should be formalized and easy to administer. Members of your team should be empowered to make commitments to most of your customers without your intervention.
Step 2 – Creating Loyal Customers and Generating Referrals
While sales and profits are measurements of success they are trailing indicators. An important leading indicator is customer loyalty—that is the emotional attachment your customers have with you and your organization.
Satisfaction and loyalty are not the same. Satisfaction is a measurement of, “I expected it and I got it; therefore, I’m satisfied.” If this were translated into a grading system, satisfaction could easily translate into a grade of “C” on any report card.
The desired score is obviously an “A” and A’s always equate to loyal customers. A’s imply that customers got more than they expected and their expectations were exceeded in some way. Based on what is truly important to customers, they received more value from you than from your competitors. The best way to create perceived value in the eyes of your customer is to always exceed their expectations. Under promise and over deliver.
Step 3 – Getting the Right Team and Keeping Them Engaged
Engaged employees are necessary for loyal customers. Employees who are disengaged with their workplace and with the work they do can drag down team performance. Employees who are disengaged show up for work, but they leave their hearts and minds somewhere else.
Your leadership is the key to creating an attractive work culture. First of all, hire the person who shares your organization’s values. You can teach the operations of the job but you cannot teach values.
Simply, it means that they are motivated to achieve and have the feeling that they are contributing to a winning team. An engaged employee trusts management, understands the mission, is encouraged to innovate to be his very best. He is encouraged to do his best and is recognized for his contribution. When this happens you have the highest level of customer loyalty, and employee retention. Employees do not leave companies; they leave owners, managers, or supervisors.
While there are many complex issues facing business, if you focus on these three areas you will have a greater chance of success.