Dennis M. Wilson | smallbizdream blog

How Prepared Is Your Business For the Future?

As business owners, we know we live in tremulous times. New industries – such as cryptocurrency – are being created overnight. Jobs are disappearing. Companies are switching industries. Tech companies continue to push the boundaries of automation through deep learning and artificial intelligence.

As modern technology pushes forward into our traditional businesses, the question for many of us is, how prepared are our businesses for the future?

Machines Are Taking Over

Businesses that fail to adapt won’t stand a chance in today’s fast-changing industry. People are now being replaced by robotics and automation for quite a number of reasons. People can only do one task at a time. They get distracted, make mistakes, and buckle under pressure; machines rarely make mistakes, they don’t take breaks, and are incredibly efficient at multi-tasking.

Technology enabled businesses to grow faster than ever, and it only gets better with time. As people put more resources in technology, production costs go down, giving more room to invest in better technologies. Back then, long distance phone calls cost 25 cents per minute or around 2 dollars overseas. Nowadays, we can talk to someone from half a world away through the internet for just a fraction of the cost. (Imagine what this would do to traditional phone industry.)

Soon, nearly every task will be automated. This implies two things: first, most manual jobs that don’t require critical thinking, problem-solving, and creativity are in danger of being taken away by automation. Industries will continue to downsize and low-paying jobs might soon be gone. White-collar jobs aren’t safe from the onslaught of automation. Neural networks might soon replace analysts, accountants, and personal assistants, as A.I. and deep learning continues to evolve.

Second, companies that rely on traditional methods could soon go out of business, unless they keep up with the times and stay relevant with modern-day customers. Amazon and online shopping will always be a threat to traditional retail businesses, and telecom companies are in dire need of a solution against the growing popularity of internet calls.

Uber and Airbnb have redefined travel and accommodation, challenging long-established companies within the industry. Cryptocurrency and blockchain technology is a growing threat to our financial sector with its permissionless, secure, peer-to-peer payment system. Innovation is no longer just an option for a lot of businesses. As a matter of fact, it’s the only way for businesses to survive in this day and age.

Fortunately, some jobs are more resilient than others, particularly those that have to do with complex human emotions. So-called soft skills and out-of-the-box thinking will be more important than ever for businesses.

The World Has Changed, and So Will be Our Businesses

History is littered with the remains of old industries that fell out of use as better technologies emerge. You’d be lucky to find relics of the past in people’s attics like the portable cassette player, VHS, film camera, and encyclopaedias. Yet they remind us of the bygone era when they became a booming business in the late 80s and 90s.

Fast-forward to the present, people do things a lot differently. We spend more time on the Internet and consume online content more than from traditional media. Over 2 billion people connect with each other using handheld gadgets many times faster and more powerful than the NASA computers of the first moon landing. Our world today is vastly different, and so will be our businesses.

Conclusion

Businesses have evolved over the years alongside modern technology. Sooner or later, they’d have to come up with something fresh, something which has never been tried before. It could take the form of a much better technology, a new concept, a better strategy, or a business opportunity. Who knows what the next disruption will be?

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.

The High Cost of Burnout and How Companies Can Avoid It

Working in a highly competitive space can push your employees to the limit. Part of our job as business owners is to identify the root cause of employee burnout and prevent setbacks that can affect productivity in the workplace.

Worse than Stress

Burnout is when your stress becomes unmanageable and like a computer short-circuiting, your brain just stops functioning. In fact, some symptoms of burnout are strikingly similar to depression and post-traumatic stress disorder (PTSD).

According to survey, burnout is affecting 95 percent of businesses and is attributed for nearly half of employee turnovers.

Loss of employee due to burnout can have enormous financial consequences. The average cost of finding a replacement is more or less half of the employee’s annual salary. Hiring a bad fit will cost the company twice as much. If left unfilled, it can result in a domino effect due to increased workload and more workers suffering from it.

How It All Starts

Burnout usually starts when employees fail to meet their goals, company standards, and expectations, which in turn forces them to work longer hours. Ironically, the more effort they put into it, the less work they’re able to do. Not having enough rest greatly affects their ability to concentrate, which makes them prone to commit errors and make poor decisions. This results in further loss of productivity.

Anger, frustration, and panic attacks sets in. Performance deteriorate despite working longer hours. They’re caught in a vicious cycle they can’t escape from. They start dreading the prospect of yet another tiresome and unrewarding day at work. It’s only a matter of time before they reach the breaking point – a full-on employee burnout.

Recovering from burnout can take weeks, months, or even a year. Burnout doesn’t go away on its own and might need appropriate medical intervention.

Stopping Burnout on its Tracks

As an employer, you need to check on your staff for stress, ensuring you apply enough pressure to get things done, but not too much that it affects business and your employees’ health. It’s a fine balancing act that can be difficult to gauge at times.

Let’s look at the major causes of employee burnout, and then come up with proactive solutions and strategies to keep them motivated.

Job mismatch. Employees are at risk of burnout when there’s a disconnect between their work experiences, qualifications and their occupation. Some factors include high unemployment rate and stiff competition in the job market. Job seekers are often left with no better option but to settle for low-paying jobs despite being overqualified, or take jobs which don’t fit with their own personality, educational background and work experience. Consider each hire as an investment where you acquire new assets to help grow your business. Spend some time identifying roles your company needs and creating job descriptions that match their work experiences and qualifications when looking for new hires.

Insufficient time and resource. Employees will experience burnout if they are given tasks without the wherewithal to accomplish them. Time is one of the overlooked factors when assigning tasks. Some employers give additional tasks but failed to consider the time element necessary to accomplish them. Each additional task will eat up some of the time intended for work and puts them at risk of falling behind schedule. Employers need to free up some of their time by investing in technology and innovation to help accomplish their tasks much faster, or, they can hire additional personnel. For growing businesses, this is more of a necessity than an option. Investing and communicating with new hires is far better than having to look for replacements to your employees who left their jobs due to burnout.

Inability to adjust to new circumstances. Changing times means your employees must be capable of adapting to modern ways of accomplishing their tasks and acquire 21^st century skills. Training and seminars for employees can help attune your business to the recent changes in the industry, particularly with the use of modern technology. Some employees are reluctant to change and find it difficult to adjust to these new circumstances. As an employer, we might be faced with a hard decision of letting them go, or having other co-workers pick up their slack. This brings up the idea of hiring the best people for the job. Flexibility and willingness to adapt should be among the list of characteristics to look for when looking for new hires as they are more resilient to stress and are less likely to suffer burnout.

Lack of time management and work-life balance. One of the most obvious reason for burnout is overwork. The best solution has always been to manage their time well. Time management is one of the skill sets your employees should have to function optimally. Workers who constantly fall behind schedule could be in need of some help on managing their own time. It might be caused by several factors such as work overload, distractions from work, or difficulties adapting to new technology. Addressing these problems may help your employees to stay on task and be able to separate work from leisure.

Job Environment. Sometimes biggest cause of employee burnout isn’t the job or the the boss, but co-workers. If you don’t get along with the people in your office then it can be very difficult. It can be a personality clash, a lack of defined work rolls, a power struggle, or any number of issues.

Conclusion

Often stress leading to employee burnout can be fixed by having open communication with your employees and a willingness to problem solve. Taking time to understand them and where they’re coming from will allow your employees feel better while lowering their stress level.

Automating your day to day tasks can make work a lot easier for your employees and decrease workload and overall stress. Having the right knowledge and skills on the use of modern business applications such as Customer Relationship Management (CRM) is your first line of defence against employee burnout in a fast-paced environment.

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.

The Key To Successful Business Innovations To Beat Your Competition

We live in a world where innovation is no longer an option. In fact, it’s the only way for businesses to survive in this day and age. More people, including millennials, professionals and employees, are starting their own businesses to improve their lives. As a result, competition will be more fierce than ever.

Innovation is important in helping businesses thrive, and stay one step ahead of the competition. It makes businesses stand out and gain a decisive advantage in the market.

Dealing with Hindrances to Innovation

Trying out something new is like throwing a wager on a business idea. It may or may not work. Mistakes are inevitable; but on the one hand, it can also be a game changer. It happened to many successful businesses who were not afraid to take some risks in exchange for a much bigger payout.

People who are too cautious are not eager to innovate. They take the same old route and go through the motions. One of the keys to innovation is to embrace the fact that you might not be able to get it right 100% of the time.

Companies who stop innovating will – slowly but surely – lose ground to their competitors. Ignoring the competition is fatal to any business, no matter how big it is. Some known industry leaders of the past have now been left behind by much younger companies whose innovations captured the hearts and minds of a much greater audience (think Amazon).

Different Views about Innovation

There are different views to innovation, particularly as something which is distinct from invention. Innovation focuses on improving an already existing technology, while invention aims at creating an entirely new technology that supersedes an old one. Smartphones, Android and IOS devices are the 21^st century innovations of the mobile phone, while automobiles are inventions that replaced horse-drawn vehicles.

Innovations can reach a point of stagnation, where each innovation is just an iteration of the previous one – just slightly better. Portable transistor radios reached its peak in Sony’s Walkman. However, when the first MP3 player (MPMan) came out in 1998, further improvements to the portable cassette player was rather pointless.

Somewhere down the roard, small business will have to choose one over the other, i.e. improving on what they’re already good at or come up with a new business idea. Samsung started out as a small convenience store that sells merchandise. Today, it is one of the biggest industry leaders in manufacturing, consumer electronics, communications, home appliances, heavy equipment, as well as research and development.

Keys to Successful Innovations

Prepare to make the necessary change. Every so often, we need to implement some changes on how we conduct our businesses as well as the type of products and services we give to our customers. Change keeps our businesses from stagnation, moves the company forward, not to mention helps us stay ahead of the competition.

Identify problems and create solutions. Some innovation could run off-course if we’re just trying to make arbitrary changes within the system or create products and services which don’t address a need or solve a particular problem. Customers always think of our products and services in terms of value, like how they will improve people’s lives or what will be the advantages of using them.

Choose a selling point for your business. There are plenty of ways you can improve on your business depending on which customer preference you want to emphasize – also known as your unique selling proposition. Do you want to be more appealing to low budget customers, or do you want sell to high-end clients? Is customer service and customer experience more important to you than anything else? Whatever it is, it should give you a distinct advantage over your competitors.

Listen to your customers. Customer surveys and are some of the time-tested methods to stay relevant with customers. CRMs and sales and marketing automation works great in maintaining customer relationships through customer feedback, customer database, customer acquisition, sales funnel, and auto-responders.

Learn from your mistakes. Innovation has opened the door for new opportunities and important lessons on how to run a successful business. Today’s leading industries and business has had many failed attempts before getting it right. But innovate, they must. Fortune favours the brave. The only way for your business to stand out and cut through the noise is to make a difference.

Be Flexible. Small business owners must be open for opportunities and step out of their comfort zones. It’s one of the biggest challenges in business because as humans, we tend to avoid risk and be comfortable with what we’re already used to. Be willing to try and even fail. It can be scary at first, but it’s important to keep the end goal in sight.

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.

How To Inspire People to Work for You

Running a successful business is easy. It relies on only two things: a leader who inspires people to achieve greater heights, and a dependable workforce who share the same aspiration and enthusiasm as their leader. Sounds simple, right?

As you’ve probably guessed by now. It’s not that simple. The ability to inspire people and bring out the best in them is one of the greatest challenges. Let’s begin by having a clearer understanding of what makes a good leader.

Starting off the right foot: hiring the right people

Rome wasn’t built in a day, let alone by one person. In business, you need a strong, dependable workforce who can carry out your company goals. It all starts by getting the right people on the bus, so to speak – or as others put it, “getting the right people on the bus, getting the wrong people off the bus, and giving the right seats to the right people on the bus.”

These tasks usually fall under the human resource department. But for business start-ups, owners might have to do the work by themselves. Qualifications for hiring new employees can be roughly divided into two aspects: personal and professional attributes.

Employees must have the right balance of good personality traits and technical competence to fulfill their assigned roles, and have the potential to grow professionally. This saves your company a lot of time and money dealing with disruptive behaviour, picking up the slack of unproductive workers, and re-training your employees.

Virgin Group is renowned for spending a lot of time and effort finding the right people. For instance, Virgin America hires 1 out of 100 people who apply to the company. It’s not surprising why their workforce is among the best in terms of personal and professional attributes, one of the secrets to Sir Richard Branson’s multi-billion business.

On the flip side, getting the wrong people can set you up for a gruelling task of micromanaging every single work of your employees, while time and again trying to hold your teams together. Best case scenario, this leads to a bad work environment, and worst case scenario it can cause a business to go bankrupt.

Keeping your best employees aboard

The need to inspire and motivate your employees on a regular basis comes down to two things. First of all, hiring takes time and money – a lot of money. Hence, you need to make each hire count. Every time you fire a person you’ve basically thrown all your efforts and resources hiring that person out of the window. In case of a bad hire, you’ll just have to take this lesser evil.

Another reason for keeping your best employees aboard is they provide great value to your company. Your seasoned employees are your best assets because they help generate more income for your company. You want to make sure they stay with you the whole time.

Losing one of your seniors or your best man for the job would be a double whammy for the company. Aside from the momentary loss, and co-workers doubling their efforts to pick up the slack, you’ll have to spend time and resources to find another one – possibly not as good as your first hire.

Your worst nightmare as a business owner is when you lose your most efficient and highly productive employees, only to find them on the other side working for your competitors, possibly taking with them some of the skills they learned from your company, as well as valuable information such as customer data.

Bottom line – take time to inspire and motivate your employees. They are your most prized assets because they are the ones who set your business in motion with your guidance and direction.

Ways to keep your employees’ spirits high

Set clear goals and let them know how they fit into your company. This gives your employees a sense of purpose and direction. They want to know what impact they will give to the company for fulfilling their assigned roles, and what the consequences are for not doing what they ought to do. Be realistic with your expectations, making sure they are neither too high that it puts a lot of strain or too low that they begin to slack off.
Let your employees feel they belong to the company. This goes beyond treating your employees like cogs in the wheel, and instead treating them more like family. Zappos.com has been featured in blog posts, articles, and short documentaries for their exemplary way of treating every member of the company. The joy and excitement felt by every member goes out to each customer when taking phone calls, customer concerns, and placing their orders.
Remember the triple A’s – Appreciation, Approval, and Attention. Your employees need an occasional tap on their backs for a job well-done. Coming from a person who runs the entire business, this would certainly mean a lot to them. Even just a simple “Thank you!,” or “Good job!” can take away a lot of stress from work, re-assures them how important they are to the company, and that they’re moving on the right track. As a business owner, you have to be genuinely appreciative of all the good things they have done for your company.

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.

How Cash Flow Can Make or Break Your Business

Managing cash flow is one of the critical aspects of business success and survival. As much as 82% of businesses crash and burn because of poor cash flow management. The smaller the business, the more crucial and challenging it is to maintain a steady income and pay the bills on time.

But what exactly is cash flow, and why is there so much talk about cash flow management when it comes to business? Let’s go through some basic concepts, understand how it affects our businesses, and find out solutions to improve cash flow.

Understanding Cash Flow

Cash flow is the movement of cash into or out of an account. This is known as the inflow or outflow of cash in a business organization. When more money is coming in through the sale of goods or services than the actual cost of running a business, it is said to be cash flow positive; cash flow negative if it’s the other way around.

Businesses will experience cash flow positives and negatives throughout their lifetime. Start-ups are the most difficult to manage for having low cash reserves and susceptibility to undercapitalization. However, they’ll have better opportunities to accelerate their business through loans, stocks, or bonds after demonstrating their ability to handle cash flow properly (known as cash flow statement).

Operational cash flow is the movement of cash during its regular business activities, e.g. receiving payments from customers, settling monthly dues, and paying out employees. Investment cash flow applies when a business acquires properties to further its goals. For instance, acquiring a vehicle through a financial institution can help boost inflow by speeding up delivery and reducing logistical cost.

Difference between Profit and Cash Flow

Some financial experts use the metaphor of looking at a still photo and watching videos clip to differentiate profit and cash flow. Profit is usually regarded as stationary data, which is determined by comparing the opening and closing balance of a company’s primary account or by its total net worth by the end of the year.

Cash flow provides a better picture of how businesses performed over the course of time. It tells us where the money is coming from, where it’s going to, and most importantly how fast. Without cash flowing in and out of the business, the whole system will come to a grinding halt. All gains in the form of assets, products, or inventories are of little consequence at this point. Having no cash to work with, businesses are on the verge of bankruptcy.

In other words, a company can increase its net worth but may actually lose the business if it doesn’t generate inflow through sales, and utilize these resources to pay the right people working for the company and acquire the best technology to improve business.

How Cash Flow Affects Your Business

Managing cash flow can be a tough balancing act for small business owners. Increasing inflow and keeping outflow at a minimum on a shoestring budget is especially challenging for small business owners.

Consider the following aspects of cash flow management:

Cost of running a business. The initial cost of starting a business is just a tiny part compared to the actual cost of running it. People can get this information through research and interviews with successful business owners. Operational costs make up the outflow including lease, water and electricity bills, fuel and maintenance, inventories, employees’ salaries and commissions, monthly amortizations, taxes, insurance, contingencies, penalties, and surcharges (if you’re not careful), and the list goes on. Expenses are either fixed or fluctuating. Some experts suggest putting a little extra and exaggerate the cost at the planning stage. The purpose is not to deter you from starting your own business, but to prepare yourself mentally and financially for eventualities. Running out of cash and borrowing only when you needed one sets you up for business failure.

Real and potential income. How much money can you realistically make with your business? Some businesses, especially new ones, can be overly optimistic and assume they can strike it rich too quickly. We need to consider other factors as well, such as the competition, supply and demand, sustainability, market value, what the trends are and where they’re headed for, and so on. Unlike the previous one, we need to be a little conservative on this. We cannot expect our chosen industry to follow the same trend all throughout the year. Our businesses should be flexible enough to adapt to changes. If the demand for a certain product or service drops, what are your other options? Do you have a method in place that allows you to get more customers and build relationships with them? The key is to maintain a specific number of customers to keep the ball rolling in order to stay in business.

Method of payment. Your business may receive payments either on a cash basis or receivables on a weekly or monthly basis – or you may have both. Cash-based transactions allow businesses to have a steady inflow of cash, whereas receivables carry some risks due to some customers not settling their dues or paying too late, costing a lot of money to your company. You can mitigate the risk by imposing penalties for late payment or encouraging them to pay early by offering rebates and discounts for settling their dues early on. Just keep in mind that any delay with the cash will cost you money. If your business needs to pay out employees on the 25^th of the month and you still have a lot of receivables unpaid, you might have to borrow on interest just to get your employee’s paid (this justifies why you need to penalize late payments).

Steps to Improve Cash Flow

With these in mind, let’s look at some of the ways to improve cash flow in your business.

Forecast your cash flow. From your research and interviews with business owners create a chart of your projected inflows and outflows for the whole year. Make sure to include all the small details and make it as comprehensive as possible. Use this to benchmark your progress when conducting your business.
Identify your key performance indicators (KPI). This answers the question where most of your resources should go to keep your business running. Some businesses failed just because they didn’t use their resources on things that would help improve its overall performance. For instance, not having enough inventories to cater a large number of customers or not investing in technology or equipment to speed up delivery and enhance customer experience will have consequences in your cash inflow.
Manage your inventories. Too much, or too little, can make your business cash flow negative over time. You need to be able to predict customer orders to keep a steady flow of cash going into your business, but at the same time, we want to avoid excess or unwanted inventories sitting on the shelf for too long.
Faster inflow, slower outflow. Perhaps the most important principle when it comes to cash flow management is speeding up the inflow of cash and slowing down the outflow. To increase inflow, obviously you need more customers. But more importantly, you need to develop good customer relationships, and have a loyal customer base to keep the money flowing in. Customer referrals from loyal customers could increase the inflow even more, which is why we put a strong emphasis on customer relationships with our Small Business Dream mini-CRM. To minimize outflow, you’ll just have to keep the money in your primary account for as long as you can. If you have to invest in technology, property, or equipment, acquire them through a financial institution instead of paying out in cash. The longer the amortization period, the smaller your monthly dues are, and the bigger your potential inflow will be.

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.