A New World Order

I have just returned for my ninth visit to China. What I have learned over the time is that China is a rich, vibrant and colourful tapestry. It is like one of those paintings that every time you go back to visit you find something you hadn’t seen or realised was there before. I would encourage anyone genuinely interested in finding a new market to visit. However, this note is not about doing business in China. That is for a completely separate series that I will post over time. For now, I wanted to discuss what for the foreseeable future is the new world order.

For all of us involved in small to medium business, international trading and foreign affairs might not matter or at least it didn’t. Now with the economic upheaval in our traditional markets created by the Global Financial Crisis (GFC) many SME’s are finding their home markets contracting and traditional export markets are in disarray. Customers are now looking for longer term credit and finding their Banks are not keen to advance funding even against documentary letters of credit (LC’s). So what to do about it? For some it is too late but for those still hanging in there it is time to determine if you have what it takes to venture outside you traditional markets and marketing methods.

Brazil (read South America), China, India and SE Asia are growing. It is their domestic middle-class, which is expanding and starting to consume more foreign goods than ever before. Traditionally Western companies have moved into these markets to set up manufacturing and tap cheap labour for re-export of their products to the West. Now these countries are importing to satisfy their own domestic demand. For those of us who have been watching this is no great surprise. In 2008 I was recommending that companies focus on selling into China rather than trying to find cheap manufacturing sources in China or Malaysia. So now, there is a new world order. Manufacturers need to find their niche in these new markets. Country of origin does matter to this new breed of consumers. They will pay for quality and reliability. Is it or will it be an easy path? The simple answer is no. However, with focus, patience and determination, opportunities abound. I will be penning my thoughts on approaches to these markets in the near future, so stay tuned.

In the meantime, keep on keeping on!

Your ever alert to new business opportunities coach

Neville Calvert

neville@thesmallbusinesstoolbox.com

The Opportunity Value of Risk

I have just come away from a meeting with a client who is looking to implement a new strategy. Really, it’s an OLD strategy with a new twist, but who am I to say anything. The issue with this new/old strategy as with all strategies really is there risks involved. As we, all know risks need to be managed. The, 64 thousand dollar, question is how?

There are a couple of ways of looking at the management of risk in your business. One is to develop procedures and monitoring to ensure that the risk doesn’t arise. This is the eradication of risk approach, see it, and kill it off!

Alternatively,the second is to see the risk for what it truly is, an opportunity to be understood and managed. The eradication or, expunging etc of risk is by far the most frequent approach adopted by management and particularly by a Board.

The Board certainly do need to be concerned with risk because that s their job and in today’s nervous corporate environment, Board risk is an issue.

I know that you may have a small company and you are wondering how does all this risk stuff affect you. Just think about it.

Most of us risk our lives just getting up out of bed everyday. We cross the road, often against the pedestrian traffic lights and with traffic coming through a busy intersection (J-Walking. Oh sure you have!), or by eating a meat pie from a dodggy road side cafe, or jumping on a new low cost airline aeroplane to get to a holiday or business destination.

That’s different I hear you say. Well, not really!

Each one of the actions outlined above is calculated and when you proceed, you have decided thatwith the benefits being assessed to outweigh the apparent risk. Just because it is done almost instantaneously doesn’t mean you haven’t thought about and how you would manage the risk.

Take, for instance, booking on a low cost carrier out of London’s Stansted Airport or even from Johannesburg or Changi Airport in Singapore. The flight might well be delayed, or they send your baggage to your previous destination from two weeks ago! On board they might run out of food and, of course, worst of all it might not even make it to your destination. I bet you have considered all these possibilities (okay maybe not the luggage bit!) and you have developed a back- up plan to cover the eventualities. You didn’t write it down, or maybe you did. In any event, you thought the whole event through and proceeded on the basis that you had managed the risk. The outcome was , you had more money to spend on your holiday or business trip. You created value for yourself. Well done you!

Now, take this approach into your every day business life. You will face decisions, every one of which is subject to some form of risk. As with your holiday flight decision, where you saved mega bucks because you chose to take a risk on a low cost airline. The same will happen in business. Can you see what the potential value might be created in understanding how to manage you risks and realize the financial benefit, rather than expunging the risk and not achieving your financial goals?

Value Risk management is a tool or process available to all businesses and professionals regardless of what size your business is. The value of the process is in its ability to meet narrow or complex businesses needs. I have used it with companies that turnover $2m a year to $1.5bn a year and everywhere in between. The process is so simple it can be incorporated into ongoing management and Board level reporting. The benefits to business are that the strategy is managed on an ongoing basis rather than once annually in the planning meeting and then stuffed away until next year.

Valuing the opportunity of risk rather than mitigating it may seem counter intuitive but it is after all the very reason the entrepreneur exists.

Until next time Your, humble keeper of risk, coach

Neville@thesmallbusinesstoolbox.com

How to Get Your New Business Started

Thinking of starting your own business? We’d like to share this thought provoking article “10 Mistakes that Start-Up Entrepreneurs Make” By ROSALIND RESNICK

So you want to be an Entrepreneur?

A common folly in many failed businesses is that the initial choice of business was wrong. Many a broken entrepreneur will acknowledge this in hindsight. This is why you need to honour the choice of what business you want to open. It is the first make or break decision you will take as your own boss.

Avoiding the pain of this first serious error is made a little easier if you field the choice with all the faculties you possess. Carefully measure and weigh the successes, skills and talents which led you to believe you could be a successful entrepreneur.

Get away from the starting block in good form by selecting the best draw for your assets right up front.

There are valuable techniques available to assess what will work for you, in your field of expertise and appeal to the market to which you have easiest access.

Initially you may have considered this new venture from a personal viewpoint and analysed your character in the process. The decision to go into business is not one taken lightly so we can safely assume you are passionate, courageous and focussed. Other information gleaned during this profiling period can be a key indicator as to what style of enterprise could suit you. The maxim is “know yourself to excel”.

Proceed step-by-step in the selection of your chosen business.  You may be able to moonlight initially to test the market and gauge your own response to the business sector you wish to enter. If it is a completely new field you could offer to work gratis for the experience.

We often see stressed high level executives turning their hand to a new small business venture in a totally different arena in a bid to escape the hectic pace of big city life. Many have gone from suits and boardrooms to aprons or overalls and deliver inspiring results!

It can be incredibly invigorating to remain in the field in which you work but as the boss instead of the employee. Choices are boundless.

Comparative analyses are vital in your selection strategy. The most graphically illustrative method to date remains a simple ‘FOR’ and ‘AGAINST’ checklist.

Research is critical. Chat with many assorted business people (as well as their staff whose opinions may have a different and enlightening bias) in the environment you plan to enter, listen and discern. Obey your own heart.

You will discover a practical step-by-step guide to key aspects of managing your own small business when you visit TheSmallBusinessToolbox.com.

How to do Market Research?

A recurring question amongst small business owners is this: Does a small business owner need to know how to do market research?

The short answer is – yes, absolutely! No business can operate successfully without knowing something about the market(s) it is working in.

However, the term “market research” is more often than not associated with terms like “statistically significant” and “sample size”, followed closely by “very expensive”! Those three by themselves, let alone any of the other technical terms usually associated with scientific research, are enough to make any small business owner throw their hands up in despair and run for cover.

So unless you have a qualification in statistics, or enough money to employ a market research company, the likelihood of a small business being able to get directly involved in a formal market research project is remote to say the least.

Yet your small business still needs information on the market it is operating in. So where to from here?

Well, its a sure bet that every small business owner, after running his or her business for a while, intuitively knows quite a lot about the market – prices, suppliers, competing companies, geographical distribution etc etc are factors that a small business owner will deal with on a daily basis.

The trick then is for the small business owner to try to put all this intuitive knowledge into a meaningful framework that will not only help them make good marketing decisions, but will also highlight areas where information is deficient.

The ideal framework for this kind of information can be found at The Small Business Marketing Toolbox. Here the small business owner will find a step by step process for developing a marketing plan unique to their business, utilising their own knowledge and filling in the gaps using methods that involve the business’s brains trust, and not the owners trust fund!

Market research is a key element in running a successful business and it doesn’t need to cost an arm and a leg. On the other hand, market research is not an end in itself – it needs to be used and incorporated in a marketing plan that will give a business direction and a competitive advantage. The good news is that any small business owner, using The Small Business Marketing Toolbox can easily and quickly put together a marketing plan that they can use to achieve their goals.