A successful business does not operate in a vacuum and it does surprise me how often business owners and senior managers cannot provide up to date information about their own market, the companies operating in it and their key competitors. Even more surprising is how many of them do not fully recognise the risk this lack of knowledge poses to the financial health of their business.

When the Duke of Wellington, who was never defeated, was asked for the secret of his success he replied that “It was knowing what was going on the other side of the hill better than most men”.

Even the most successful business should be aware of what their competitors are doing. If you are making money, somebody will want to replicate your success or steal away your customers. If not, then who is making money and what are they doing to be successful? A superior knowledge of your competitors can provide your business with the opportunity to claim a clear competitive advantage, by identifying their strengths and weaknesses and then by taking actions to exploit this knowledge.

So do you know your key competitors, I mean really know? Who in your business is responsible for collecting and collating all the information you need to keep ahead? In my experience all the information is usually there, but fragments are often held by individuals and not collected in one place, where a clear picture can be drawn.

Start by drawing up a table, listing your main competitors across the top. Down the side list the key elements of your product or service that customers appreciate. These might be price, quality, customer service, financing, flexibility etc. Then fill in the table by comparing prices, getting feedback from your customers and suppliers, talking to your own staff – especially if they have previously worked for a competitor – not forgetting internet and media research. Eventually, you will have a completed table that allows a proper comparison to be made and for you to see if there is a proper competitive advantage in place.

But this is just the start.

This was the title of a report commissioned nationally by Business Link back in 2002. Questioning 1,002 small and medium sized businesses nationwide, it showed companies employing up to 250 staff that seek and use business advice typically make double the profits of those that don’t; but that most SME companies shunned experts.

There is no reason to suppose that that this has changed substantially over the last ten years – so does that mean that your business is missing out on potential benefits? This has obvious implications for the long term prospects of individual companies as well as the wider economy.

Back in 2002 the report showed that companies who remain open-minded about business advice get the best results. High-growth “entrepreneurial” businesses were the most likely to seek out strategic advice, with the 60% doing so reporting typical growth rates of 36% compared to the (then) average company growth of just 6%.

Of course many businesses that don’t take advice believe that they don’t need it. The report back in 2002 challenged this inertia and it would have been good to have an updated piece of work to see if attitudes had changed. However, no follow-up report was produced before the plug was pulled on Business Link.

Expense if often quoted as a reason for not taking advice, but the report back in 2002 suggested this could be a false economy. Back then, businesses that did take advice typically spent £4,200 a year on it and valued the resultant gross profit at £80,000 – a return of nearly 2000%.

If you want to know more about the kinds of business advice available to you and how it could deliver a clear and substantial payback to your company, please feel free to contact us for a phone chat or to arrange a meet for coffee, at no cost or obligation.

To exploit the opportunities raised by interesting times, the business needs to be in the right shape and have the right people on board. Have you?

Take a look at the processes operating in the business and ask the question “are they still fit for purpose”, do they stand up against the best of your competitors? It’s a good time to get rid of unnecessary operations and unnecessary costs. Take a long hard look (or get someone else to take a long hard look) at where your money is being spent and whether better deals can be negotiated with existing suppliers or cheaper alternatives identified.

When effecting change remember to engage with your staff. Decisions are easier to implement if people can understand the why and see the benefits.

Invest in the business by taking the opportunity to increase the knowledge within it. Slow economic times increase the availability of good people – actively look for them and recruit the best. Look to increase training for the current staff, it may hurt in the short-term, cost wise, but suppliers can have their arms twisted and the time taken has less of an impact on your business. Be ready for the good times, not be exposed by them.

If there are members of staff who are not contributing, then move them on. This cannot be a knee-jerk response, it is something that needs to be planned and you should have the processes and support in place to effect the changes and deal with any fall out.

Finally, “Interesting times” can be good times to identify opportunities. Be alert for competitors looking to sell or exit a market, potential customers may be more willing to receive your approaches. There are often bargains just waiting for you.

Goes the old Chinese curse and whatever we think of the world, these are interesting times for business. So what can you do to keep your firm strong enough to see off the lean times and ready to seize the opportunities that are out there, both now and when the economy picks up?

First of all make sure you are going in the right direction? Be clear on what the business needs to do and lay down the specific goals and objectives to be achieved for the business to survive and thrive. The more clearly you know what needs to be done (and why) the less chance you end up wasting time and treasure.

Take the opportunity to stand back and have a look at your customers.  Who are the profitable ones and do they still love you? Just as importantly, reassure yourself that they will be around to place future orders.  Try not to waste resources on customers where you don’t make money, cut them adrift.

Double check your competitors have not found the recipe for success. If they have, copy it and if they have not, keep looking.

If the money does not appear to be in your usual market, find out where it is. The UK may be bumping along between stagnation and recession, but elsewhere in the world things are booming. The Emirate of Qatar has plans to spend $125bn over the next five years and elsewhere China and India continue to grow rapidly, it’s a globalised word and you can be part of it.

Stand out from the crowd. Raising your business profile has been made easier and a lot less expensive thanks to social media. Exploit the opportunities presented by Facebook, Twitter, LinkedIn and the rest. If you are not doing it, your competitors will be.

One of my first assignments was working with a printing business, based on the south coast of England. The directors had requested a business health check report to be used in promoting the sale of their business. They were confident there were no issues to be addressed.

Within twenty minutes of starting my structured questionnaire we had discovered that Pareto’s Law was alive and well in this business. There were about 25-30 sizable customers, but only five of them supplied over 80% of the turnover. I asked about contracts being in place. There were none!

It appeared the relationships with those five customers were solely based on personal relationships, developed over the years, between my clients, the Managing Director and his Finance Director (the wife) and key individuals from the customers. Everything was done on a handshake and a promise. To make matters worse, there was no evidence that any other members of staff had ever dealt with these key accounts.

A valuation for the business had been made by their accountants and was based on current profitability and both Principals were looking forward to receiving this sum and enjoying a retirement in warmer climes.

At the end of my review, the main conclusion was the business had a high degree of risk and, in my opinion; there was no possibility of selling it for the current valuation. Who would buy the company when there was no secure pipeline of new business? Remove the Principals and there was no business!

OK someone might be prepared to buy, but surely would need to tie down the management with some form of “golden handcuffs”.

Unsurprisingly the review was not included in the sale document. However, it was a surprise to me that the business was sold within a year and with the key players exiting the business.

Two years later the business ceased to exist.

It always seems there is never enough time in the day, but are you and your staff concentrating on the really important things?

In the early 1900′s, management consultant Ivy Lee visited Charles Schwab, president of the Bethlehem Steel company and offered to teach Schwab a simple time management technique in less than 10 minutes that would raise the productivity of his staff by at least 20%, if not more.

Lee insisted that he didn’t want to be paid up front. After a month of using the technique, Schwab could decide for himself how much it was worth and send him a cheque.

Schwab agreed and Lee gave him the following formula: “Write down all the tasks that you need to do. Then at the start of each day, select the six most important items you want to do that day and rank them in order of priority.

Start working on the first item and don’t stop until you are done or have gone as far as you can.

Then, reprioritise the remaining items based on the reality of the day and start working on the next highest item.

If something comes up during the day, only stop working on your current task if the new item is more important; otherwise just add it to your list. If you don’t complete all the items on your list, don’t worry, just start again tomorrow in the same way.”

Schwab taught the technique to all his staff. After just one month, he was so impressed with the results that he sent Ivy Lee a cheque for $25,000 saying it was the best advice he’d ever received!

I guess we should have given the business name more consideration before we started, but to be honest it wasn’t just a name for us, it was a statement of intent. A statement, we now realise, is lost on all those without a classical education or an interest in ancient history, but a statement that still drives the service and delivery that we offer.

Back in ancient times, the Phrygian city of Gordium (now central Turkey) had, in the Temple of Zeus, an Ox Cart whose shafts were bound to a post in a fiendishly complex knot. It had been placed there by the founding King, Gordius and a legend grew up that whoever could solve the problem of the knot would become the ruler of Asia. In 333BC Alexander the Great invaded Asia Minor and wintered at Gordium.

Unable to resist the problem, or the legend, Alexander attempted to untie the knot. Being unable to find the ends of the knot as they were cunningly hidden inside, he drew his sword and cut through the ropes.       

The appeal of this story for us was the decisive action shown by Alexander in solving an intractable problem through the use of a bold and innovative stroke.

We cannot promise our clients they will end up ruling the known world, or acquire honours and treasures. What we do promise however, is a clear insight into their business needs and requirements and match them to a fast, decisive and cost effective solution.