Primary market research could also mean going out and talking to consumers.  What are their likes and dislikes about a particular product or service?  This will help establish if there is a particular need in the market that is presently not being met.  It can also give you ideas for new features you can add to your product or service.   This type of research can be done through surveys, focus groups, random interviews, or even cold calling.

Whether it’s talking to industry participants or actual customers, a business owner always needs to stay connected on a grassroots level.  The business environment is constantly changing and you need to stay on top of the latest trends.  If your business is not constantly evolving, you are losing ground to those who are.

This week, I will summarize the point of view of another great author on the subject of personal productivity.  In his book, “The 4-hour Workweek”, Tim Ferris uses an interesting title for his chapter on time management: “The end of time management” (how can anyone resist after reading such a title?).  He makes an interesting distinction between ‘being effective’ and ‘being efficient’.  Most people are too focused on doing more with less (i.e. being efficient).  However, that doesn’t necessarily translate into effectiveness, which Tim defines as “doing things that gets you closer to your goals”.  He encourages to keep in mind two things:

1.  Doing something unimportant well does not make it important.

2.  Requiring a lot of time does not make a task important.

We should focus our time and effort on important, ‘mission critical’ activities, something he illustrates using ‘Pareto’s Law’.  Vilfredo Pareto was a famous economist / sociologist who made the bold statement that 80% of wealth and income was produced and possessed by 20% of the population (this holds true even today, and the ratio is often bigger).  Tim believes that this statement can also be applied outside of economics. For example, 80% of consequences flow from 20% of causes; 80% of results from 20% of effort and time; 80% of company profits come from 20% of products and customers; 80% of problems come from 20% of your customers. When coming up with a ‘to do’ list every day, we should focus on the 20% of activities that will really help us move forward.

The author also brings to light “Parkinson’s Law”, another important principle of time management. The law states that “a task will swell in importance (perceived) and complexity in relation to the time allotted for its completion”.  For example, if I gave you 1 week to complete a report, you will find ways to do it in a week.  You will probably procrastinate for a few days and then put something together in the last few days.  Interestingly, the same will happen if I gave you 24 hours to write the same report.  The time pressure will force you to execute and focus on the essentials).  The lesson here is simple: shorten your work time in order to be more productive.

To conclude, I would encourage you to use a combination of Covey and Ferriss’ approaches:

1.  Create a personal vision or mission statement and identify the different roles you have in life (Covey).

2.  Identify a few ‘mission critical’ or ‘Quadrant 2′ activities for each role that you would like to accomplish this week (Covey + Ferris).

3.  Plan out your week and schedule these critical activities (Covey).  When you schedule the time for these activities, limit the time on each activity in order to be more productive (Ferris).

That’s it for time management.  Plan well and move forward!

I decided to go through the titles in my bookshelf and take a look at what the experts had to say on the matter.  The two that were most useful were “The 7 habits of highly effective people” by Stephen Covey and “The 4 hour workweek” by Tim Ferris.  In part 1 of 2 of this blog posting, I will go over what Stephen Covey has to say on time management and in part 2, I will do the same for Tim Ferris.

In his book, “The 7 habits”, Stephen Covey sums up his view on time management in a single sentence: “Organize and execute around priorities”.  We should strive to prioritize and clarify our values and then “compare the relative worth of activities based on their relationship to those values.”  Put another way, in order to really move forward in life, we have to identify the things that are really important to us and focus our activities in those areas every day.

A concept I found absolutely amazing in the book is Stephen’s ‘time management matrix’.  Essentially, every single activity we do can be placed inside the matrix, which consists of 4 quadrants.  In Quadrant 1, we find all of the activities that are urgent and important (e.g. a  crisis, a deadline; any problem requiring our immediate attention).  For instance, completing an urgent report can be classified as a Quadrant 1 activity.  Quadrant 3 activities are urgent but not important (e.g. interruptions, an urgent but unimportant email, etc.)  Quadrant 4 activities are unimportant and not urgent (e.g. time wasters such as watching TV, talking on the phone for hours, etc.).

Activities that are directly responsible for our growth can be found in Quadrant 2:  the important but not urgent.  It involves things like nurturing relationships, exercising, long term planning, preparation, prevention, etc. For the small business owner, it can include things like maintaining a strong relationship with clients, attending networking events to make new contacts, reviewing and updating the business plan, additional training / education to further our knowledge, etc.  Deep down, we know that these things will make our business stronger but we don’t do them because they are not urgent.  However, in order to be effective in the long run, we must absolutely focus our attention on these Q2 activities.  And in order to make time for them, we have to learn how to say ‘no’  to activities in Q3 and Q4 (Q1 activities are urgent and important and thus hard to ignore).

The last time management tool at our disposal in the book is the ‘Weekly Planner’.   This is where you plan all your Q2 activities for the week.  Before you do so, spend a few minutes identifying the various roles you have in your life (e.g. parent, husband/wife, business owner, volunteer at a local organization, etc.).  This will help you establish your priorities.  Once this is done, think of a few activities you would like to accomplish during the course of the week.  The final step is to actually schedule the activities in your planner / calendar.  This will ensure that your goals for the week are more than just wishful thinking.  It ensures that you plan ahead and set a specific time during the week when you expect to accomplish each task.

I was never a fan of writing down goals, schedules, etc.  However, I recently realized that I have a tendency to want to do many things over the course of a single day or week and end up feeling that I haven’t accomplished enough with my time.  Identifying my roles and planning Q2 activities on a weekly basis forces me to be realistic in what I expect to accomplish.  In my next post, I will go over Tim Ferris’ view on time management, an interesting twist to what I covered today, but very much based on the same principles.

When you are applying for a grant, loan, etc., you will be required to provide financial statements (income statement, balance sheet, cash flow).  An area that can be problematic is providing expense data (since the business is not yet off the ground).  Performance Plus provides you with an accurate cost structure of similar businesses in your industry. You can also analyze expenses based on different revenue levels and thus project how your cost structure may change as your business grows.  Existing companies have the option of entering their business data (revenue, expenses, assets, liabilities, etc.) which can then be used to benchmark their company against industry averages.  This can help them identify areas in which their business deviates from the industry (e.g. not spending enough on advertising).

Another powerful free tool that should not be overlooked!

I was very impressed with the mentor.  He seemed very eager to help the young man succeed.  I thought to myself that he is exactly the kind of person I am looking for in a mentor.  I wondered if he would be willing to take on a similar mentoring role with me.  I read the article again to see if it mentioned his contact information.  It didn’t.  All I had was his name and where he worked (BDC).  I then went on the BDC website to search for his name.  Nothing either.  I could start calling each BDC branch one at a time, but it would be time consuming. Besides, I wouldn’t know what to say to him.  Personally, I’m a big fan of email.  I like getting a conversation going through email first before a face to face meeting.  It allows the exchange of basic information.  There is also less pressure on both sides and it is less intrusive (I find it annoying when I receive a call from someone, who wasn’t referred to me by somone I know, asking to meet me…it doesn’t seem natural).  If the email exchange goes well, I then suggest a meeting in person.

The problem here was that I couldn’t find the gentleman’s email address anywhere.  I then had a great idea…a real ‘long shot’.  Anyone with a corporate email address will notice that  it usually follows one of several patterns:  lastname.firstname@company.com, firstname@company.com, “x”lastname@company.com (where ‘x’ is the first letter of the first name), etc.  What I decided to do was to send an email to all these different email combinations, hoping at least one of them would hit.  I kept the email very simple.  I talked briefly about my startup and the progress I made so far.  I also included a link to my website, in case he was interested in learning more about me.  Here is the email I sent:

Like I mentioned, this was a long shot.  The odds of reaching this person was small and the odds he would reply even smaller.  However, within a few days, the gentleman replied.  Not only was he willing to answer my questions, he insisted we meet in person the following week.  Our meeting went extremely well.  Pending some administrative stuff, we will start our mentoring partenership shortly.  This just goes to show that every once in a while, we need to take long shots in life (whether in our personal or professional lives).  It’s only our fear of rejection that is keeping us from taking these risks.

Why not just pick up the phone and ask to speak with the president of a big company to explain why your product or service can make his or her life easier?  Don’t think it will work?  It worked for a friend of mine who has his own business planning software company.  A few years ago, he called up the then President and CEO of Corel, Michael Cowpland.  He didn’t know Mr. Cowpland in person so he called the general number and talked to the receptionist.  Amazingly, there were very few barriers and within a few minutes, he was speaking directly to Mr. Cowpland himself.  He introduced himself and explained how including his software alongside Corel Wordperfect could make Corel’s product offering more competitive and help differentiate if from MS Office.  Mr. Cowpland asked him to visit his office that same afternoon.  My friend then met with Mr. Cowpland, along with senior members of his product development team.  Shortly thereafter, he won a licensing contract to include a copy of his business planning software with Corel Wordperfect.

Take long shots every once in a while (i.e. huge potential payoff, little chance of success but zero downside).  You’d be surprised at how a seemingly crazy idea may end up being one of the greatest decisions you’ve ever made.  Someone once told me that when you take risks, things happen.  You disrupt the status quo and set things in motion.  You create ripples in otherwise calm waters. Yet, one of those ripples can potentially transform itself into a powerful wave.  It’s true that the odds are not in your favor.  But then again, what have you got to lose?

I previously mentioned a great book on small business marketing called Duct Tape Marketing by John Jantsch.  In it, he introduces a great concept called the marketing hourglass.  In marketing, we often hear about the marketing funnel.  where businesses “attempt to generate leads on a broad scale and then funnel them toward becoming a client with increased contact and content”.  Though useful, it leaves out a critical part, namely, what to do with clients once they have made a purchase.

What many new businesses don’t realize is that the majority of their growth will most likely come from:  (1) selling premium products and services to existing clients and (2)  the referrals generated by theses same clients.  I was talking to my programmer recently and asked him about how he markets his business and generates leads.  He told me he doesn’t do any marketing.  All his business comes from word of mouth or referrals.  I asked another friend of mine who operates a successful translation company with several employees.  He told me the exact same thing.    In both instances, I was expecting to hear about marketing strategies related to advertising, cold calling, B2B marketing, or today’s catch word, social networking.To take into account the power of repeat business and referrals, the author of DTM introduces the concept of themarketing hourglass.  Similar to the marketing funnel, it exposes your potential clients or suspects to your marketing program.  In addition, it offers additional products and services once they become clients (i.e. make a purchase), thus the idea of the hourglass.

For example, lets say you have have a flower shop.  To new clients, flowers for personal use  may be your only product offering.  To repeat clients, however (with whom you have established rapport and trust), you can start offering premium products (e.g. premium priced flowers, decorations for wedding, special events, etc.).  This is where the bulk of your profits will be generated in the future.  Not only does it diversify your product lines, it also employs what I like to call the ‘poker mentality’.  Poker players will often show strength (by being cocky or trying to intimidate others) when in fact, they have a very weak hand.  Likewise, they will pretend to have a weak hand when in fact, they have cards that will send everyone home early.  The lesson here is deception and it can be used to your advantage.  To your competitors, you’re just a ‘mom and pop’ flower shop selling pots of flowers.  In reality, however, you have an arsenal of products and services up your sleeve that you mostly market to your repeat clients.

Start employing an ‘hourglass marketing strategy’ rather a ‘funnel marketing strategy’.  The latter is a short term model used to generate quick profits.  The former is a long term model that ensures the continued profitability of your business.

Operating a business in Quebec means sometimes having to write documents in both English and French.  Since most people are usually native speakers in only one language (in my case, English), writing in their second language can sometimes be problematic.  I usually have friends double check my French documents (e.g. emails) before sending them out.  However, this whole review process can be time consuming.

Enter a new feature from Google Docs.  At the click of a button, you can translate your text into your choice of 42 languages.  All have to do is select the text in your Google document, click ‘Translate Document’ and then select your language.

I haven’t tried all 42 languages, but I can definitely vouch for the English to French and French to English translators. I remember how not too long ago, the quality of online translators was extremely poor, sometimes even comical.  Since then, however, there has been some major improvements.

I still wouldn’t rely on this tool as my sole translator.  In other words, it is still necessary for a native speaker to proofread the translation.  However, it is much better than starting a translation from scratch. From my experience, It also reduces the time needed for proofreading by at least 50%.

A thumbs up once again to Google for thinking of another cool way to make our lives easier.

Every company needs a strong UVP.  Benefits include greater differentiation from competitors, an increase in the quantity and quality of leads, and greater market share.  Once again, remember to include tangible results in your UVP.  Statements like “the most technologically advanced system in the market” and “best in its class” don’t mean much in today’s world.  Every other company uses a similar statement and there is no way of knowing who is telling the truth and who isn’t. Ask yourself:  “What makes me different from everyone else?”, “What need am I satisfying for my target market that others have not addressed?”  You can also ask your existing clients.  Their perspectives on why they do business with you might point you in the right direction.  The following is an example of a great value proposition:

“Our company is the exclusive provider of patent-pending project management software for paving contractors, saving U.S. contractors over $34M in 2005.”

The statement is specific.  It sets the company apart (exclusive provider, patent-pending software) and it demonstrates tangible results ($34M in savings in 2005).  It answers the questions who, what, and why all in one sentence.  Here are a few other good ones:

“Tectronica offers solutions that will improve productivity by 22%.”

“Our clients are able to reduce staff by 18% and maintain productivity levels.  In most cases, their productivity actually increases.”

“Our clients have experienced pay back periods of just nine months when investing in our technology.”

I attended a great workshop at YES Montreal a few months back on negotiation, an important skill for a small business owner.  It’s a skill we can put it to use in many different situations from our dealings with suppliers and customers to exchanges with our employees.

A key part of the negotiation process is preparation and the side that is best prepared normally has the upper hand.  This includes having a clear list of your objectives and the areas that you are willing to compromise.  It also means researching your adversary, their objectives and the underlying rationale.  The more information you have, the better.  The icing on the cake is to anticipate potential areas of disagreement and having alternative solutions ready.

A key concept introduced in the workshop was the concept of “Wish, Want, Walk”.  Before any negotiation, have these 3 things ready.  The ‘wish’ is your dream goal or result.  The ‘want’ is where you think the negotiation will end based on external market forces.  This is where a majority of negotiations are closed.  The ‘walk’ is the point at which it is better for you to leave the table.  In other words, you are losing too much money, pride, status, etc. and are simply not worth it.

It is important to frame an offer before actually making one.  By framing, I mean creating a positive atmosphere and building attraction towards the offer.  It can be viewed as the momentum building phase that leads to the offer.  An example from daily life is the rousing speech given by a presenter just before the big comedian, singer, etc. comes on stage.

Contrary to what most people think, your first offer should be well above your ‘wish’ point.  For example, if your dream result is to sell your company for $1 million, your first offer should be well above this point (e.g. $1.5 or $2 million).  Studies have shown that when one side throws out a number that is higher or lower than expected, the other party has a tendency to move their opening position closer to the opening offer.

Never make the first offer if you are unprepared.  You may be setting yourself up for a big loss.  Conversely, your opponent might call your bluff and ask you for your rationale, which will reveal your inexperience and lack of preparation.  The most advantageous situation is to make the first offer (above ‘wish’ point) and being prepared at the same time.  After you make your first offer, it is important not to say anything.  You already framed your offer and elaborated your points.  There is no further need to justify yourself.  It’s now up to the other side to make the next move.  This also applies for any counter offer you make.

As you progress through the negotiation process, don’t forget your ‘wish, want, walk’ list.  As well, be sure to really listen to what the other side has to say.  If things heat up, you can always leave the negotiation table and take a break.   When things cool down, you can resume talks.  A key thing to remember is that you should never get emotional or take things personally.  Negotiation is an everyday process and you should view it as such.  Furthermore, if you are well prepared, an offer you consider outrageous or ridiculous will be very easy to ‘deconstruct’.

Secondly, the negotiation process will go a lot smoother if parties adopt a ‘win win’ attitude.  It is always better when both parties leave the negotiation table content with the settlement.  They may not have won on every point, but they don’t feel cheated.  An exception to this is when one party has a clear need for the deal.  Naturally, the ‘needy’ side will have to compromise a lot more than the ‘less needy’ side.  For example, in the recent $4.75 billion purchase of NB Power by Hydro Quebec, many people were shocked at the thought of giving up energy sovereignty to an outside province.  However, the ‘needy side’, in this case, NB Power, had been crippled by financial debt and was a financial disaster in the making for many years. One side clearly needed the deal to be done.  The process described in this post is more applicable when two parties are on more ‘equal terms’.

Keep all these principles in mind the next time you are negotiating with a supplier for lower prices or an employee wanting a big raise.  It will increase your chances of success and make the overall process a lot less stressful.

I was at a  networking event a few months back and while having dinner, I happened to be seated next to a bright young man who was completing his MBA.  We talked about many things, one of them being entrepreneurship.  He was interested in this topic since he planned one day to launch his own business.  Outside of school, he was very passionate about tennis.  In fact, he had been giving private lessons for several years and he was now interested in turning his hobby into a full fledged business.  So what was holding him back?  In order to launch his business, he needed several hundred thousand dollars in start-up cash.  His idea was to create a full fledged tennis school and training center.  The high cost of his venture prevented him from moving forward.

There is nothing wrong with thinking big.  However, that being said, we also have to be realistic and willing to start small.  The ‘big picture’, if too rigid, can get in the way of progress.  With the gentleman and his tennis school, there was nothing preventing him from starting his business.  In fact, one could argue that he was already ‘in business’ since he was generating revenues as a private instructor.  Instead of waiting around for a big infusion of cash, he could still move forward by growing incrementally.  He could think of ways to increase existing sales.  Eventually, he could hire another instructor or possibly outsource the teaching altogether.  With more time on his hands, he could then work on introducing new services, creating partnerships, etc.,  things that will take his small business to the next level.

Another problem with having an ‘all or nothing’ attitude is that it prevents us from developing our creativity.   A small business owner constantly needs to be creative in order to solve day to day problems.  They should never let obstacles get in the way of progress.  If they can’t get a loan for their business, they can  try bootstrap financing (raising the funds from friends, family, co-workers, former clients, etc.).  I once met an extremely successful real estate investor who raised his initial investment capital by writing personal letters to every doctor and lawyer he could find.  He figured people in these professions made a lot of money and some might be interested in being passive real estate investors.  What if you don’t have money to spend on marketing?  You can use low cost marketing techniques like direct mail, pay per click, or referral marketing.  What if you don’t have money to pay for a professional website?  Have you considered bartering with a small web design company who has an equal need for your services?   The point is:  there is a solution to every problem if we’re creative enough.

One final problem I see with the ‘all or nothing’ attitude is that we shouldn’t feel entitled to receiving large sums of money for a ‘great idea’.  Investors are not there to make charitable donations.  Why should I give someone $500k of my hard earned money just because he or she has a great idea?  Investors spend money to make money.  They want to see a great product, new markets, strong initial sales, an experienced management team or board of advisors, exclusive partnerships, etc., thing that will support the future growth of the start-up.  There is no problem with dreaming big.  But as the saying goes:  “A journey of a thousands miles begins with a single step.”