Six habits of successful managers in a downturn

In an economic downturn, there are winners and losers in every sector. Gerard Burke, Programme Director at Cranfield School of Management, discusses the characterises of owner managers who grasp the upside of a downturn

As all business owners will be more than aware of the economic situation is currently a challenging one. Those SME owners who steer their companies through the current choppy economic waters will have the following characterisitcs:

Being in control

In the current climate, it's easy to feel at the mercy of forces beyond your control. Winners take ownership of their own destiny. No-one can control the macro-economic climate just now. Nevertheless, you can still control what you do in your business. You can have an inspiring vision and communicate it well; be proud and confident about what makes your business great; make plans and invest wisely, and grasp opportunities others are too timid to spot.

Confidence

These days it's tempting to focus only on today and tomorrow. You and your people also need a compelling vision for the medium to long term future. Communicating a confident vision for the business and yourself in an inspiring way will have a knock-on effect on other people in the business, your customers and suppliers.

Be distinctive

In a recession, some owner managers will scrabble for any business they can get their hands on. As a result, they risk losing sight of their product or service's unique selling point and can end up being treated like a commodity and coming under severe price pressure. Winners clearly articulate the distinctive benefits they bring to their customers.

Ensure your offering is distinctive and customers are prepared to pay for it. If you are clear about your distinctiveness, you could be better off increasing prices rather than reducing them, even if it means losing customers who don't value you and may be costing you money.

Strength

You need to be absolutely rigorous in managing your business. Focus on the things that really matter, manage cash religiously, challenge costs and waste. Make immediate bottom line improvements by chasing debtors, insisting sales staff adhere to a tight pricing system, negotiating supplier discounts, reducing fixed costs and shedding unprofitable customers. Your plan must be robust enough to survive variances and you need indicators that give you early warning signs of change.

Wisdom

Don't be tempted to stop all investments. It preserves cash in the short term, but restricts the ability to take advantage of the downturn and is de-motivating. Some owner managers will take big risks in an attempt to drive sales. Winners continue to make wise investments for the future. Differentiate between investments that are crucial to bringing about your vision and those which are discretionary. Before moving into new markets and launching new products, consider whether you have fully exploited existing niches.

Being prepared

For canny businesses, a recession is an opportunity to redefine their sector and their position in it. Understand your sector and keep a keen eye on your competitors. You may gain access to markets, potential customers, premises and people who in better times might not be so readily available. From weaker competitors, you may be able to acquire customers or key staff. You may even be able to acquire some of your competitors. In all cases, be ready to seize opportunities to grasp the upside of the downturn's.The Business Growth and Development Programme (BGP) is the UK's leading programme for ambitious owner managers.

For more information visit www.cranfield.ac.uk/som/bgp


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Why VoIP is an all-in-one solution

VoIP allows businesses to integrate email, video and phone applications, reducing cost and increasing productivity, says James Chirunga of Riverdale Voice & Data

Businesses large and small have woken up to the benefits of VOIP (voice over internet protocol), especially in the current economic climate. Many are looking for new ways to communicate effectively without compromising on cost, quality and voice clarity while start-up companies can choose to have their entire voice and data communications handled by VOIP.

VoIP converts the voice signals from your phone into a digital signal that can travel over the internet. If you are calling a regular phone number, the signal is then converted back at the other end. Depending on the type of service, you can make a VoIP call from a computer, a special VoIP phone or a traditional phone, with or without an adapter. In addition, new wireless "hotspots" in public locations such as airports, parks and cafés allow you to connect to the internet, and may enable you to use a VoIP service wirelessly. If your service provider assigns you a regular phone number, you can receive calls from regular phones that don't need special equipment, and most likely you'll be able to dial just as you always have.

In the UK market, VoIP is forecast to make up 34% of all UK business landlines by 2010. Worldwide, Europe has the largest telecommunications market, measuring $1 trillion, with the US second at $923 billion and Asia/Pacific third at $715 billion. Overall, the international market is expected to reach $4.3 trillion in revenue by 2010.

So what are the real benefits to your company? The most obvious is the fact that VoIP saves money and is cost-efficient. Whether you're using VoIP for your residence or your business, you'll find it a lot cheaper than your normal landline, be it short or long-distance calls. Costs vary from one provider to another. Some allow unlimited calls and some, such as Riverdale Voice & Data, charge only a small fee. This alone will reduce cost and increase productivity. Another massive advantage of business VoIP is the reduction in long distance charges. By combining data, video and audio needs, companies save on bandwidth usage.

Using VoIP enables you to integrate activities such as email, fax, web conferencing and video with your voice phone needs. You can receive emails, voicemails and faxes directly into your inbox, accessible from anyway in the world. This way, you'll save more money and energy as it combines all of the services into one basic application. VoIP actually enables businesses to become greener.

VoIP allows your company to choose its own area code. This is especially beneficial to some companies that use virtual office services. Some small firms find this service extremely helpful. That way, they can have as many mobile employees as they like, but one centralised mail and contact point without the need for multiple numbers.

Even call centres are switching to VoIP so they can hire employees worldwide. Staff can work in different time zones, giving greater customer service benefits year round, and hiring home-based employees is another way businesses are saving money.

If you have employees who travel frequently, they can now remain virtually connected with the company and save money on fees. Without VoIP, when customers call your employees and they are not in the office, they are most likely to hang up and the company will lose a potential sale. Using VoIP, the call will be routed instantly to the employee's mobile phone or a nominated landline.

There is greater productivity when employees can integrate their email and phone services with one application. They can conduct business with VoIP on laptops at any time, day or night. With the option to get VoIP phone numbers with area codes throughout the country - and some worldwide - businesses can expand by choosing local area codes for the city, town or country they are targeting.

Another great benefit is that features that typically cost extra with normal phones are bundled with VoIP. These include voicemail, call forwarding, call waiting, caller ID, call block, call return and "do not disturb" functions. VoIP can also be used to avoid huge conferencing costs and enable secure audio and video conferences to offices worldwide. This reduces long-distance call costs and means remote employees can take advantage of calling each other and corporate headquarters more frequently.Depending on the service you purchase, you may need a computer, a special VoIP phone or a regular phone with an adapter. If you are calling a regular phone number, the person you are calling does not need any special equipment; just a phone.

The above are some of the many factors that a company should look at when deciding if integrating VoIP into its current systems will work for them and bring in much needed cost savings. Companies that heed this technology will be positioning themselves for stable and marked growth when the economy recovers as they will be able to be more agile and flexible to adjust to any market conditions.James Chirunga is chairman and chief executive of Riverdale Group.

For more information visit riverdalerc.co.uk/voiceanddata.aspx

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New online business networking opportunity for small firms

The online business networking world looks set to move to a new level with the launch of a unique site that is dedicated to helping small and medium sized companies continue to succeed in the current economic climate.

The Business Network Online (BNO) - developed by the British Chambers of Commerce and Accredited Chamber Network - takes the best from existing business-orientated networking and tendering sites but adds one crucial new function - realistic opportunities in the form of tender alerts so companies can pitch for and win new contacts, covering both the private and public sectors.

Currently websites offer either business networking or tendering, but the BNO is the first to do both, providing a safe platform for people to buy and sell their products and services from as well as develop and build strong contacts faster.

Also, some business owners feel that many of the existing sites are aimed more at individuals and people interested in collecting ‘colleagues' as opposed to providing a genuine opportunity for companies to build their profile and target potential new clients.

But the BNO addresses this head on, aiming to provide people with a practical business tool that at least goes some way towards opening up new markets and generating real leads. In the current climate this is critical.

Business networking is on most company agendas, but often gets neglected as people get bogged down with the day-to-day priorities. But in 2009 it has to be top of the list - not least because no company can afford to become invisible or let its contacts book become outdated. And in many ways this is one of the great things about the BNO - it gives people access to trusted UK wide contacts both locally, regionally and nationally so you can meet new business partners and suppliers, get your name out there, share best practices and discuss key business-related issues.

It also allows companies to push ahead with new opportunities in a cost effective way. Clearly the ultimate goal is to help increase sales and profit, which is what the tender alerts are all about. This facility matches up businesses opportunities with companies registered on the database. As matches occur businesses will receive an email alert SMS text. The fact that companies will have selected the business categories means that the alerts will be relevant and of interest. For many small organisations the big attraction is that it will simplify the way they operate.

On the purchasing front, the BNO gives you access to competitive pricing, helps to reduce procurement costs by sourcing new suppliers and means you can buy with confidence within a trusted network.

John Dunsmure, Managing Director of the British Chambers of Commerce, said: "All businesses are having to look for new ways to drive sales during these difficult economic times and we believe this tool will help in so many ways. It's a simple and effective way to meet new business partners and suppliers, reach new markets and customers, win new business through tender alerts and gain more competitive pricing.

"It's fast and easy to use as well as being safe and secure as it's operated through the Chamber community, which is a trusted environment."

For more information visit http://www.britishchambers.org.uk/

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Why Women Make Great Franchisees

By Carrie Brenner

Some women plan on becoming business owners practically as soon as they can talk and others fall into it by happenstance, but the motivation is often the same -- they want to escape the drudgery of working for someone else and make their own business decisions. Mary Ellen Sheets became an entrepreneur once her sons went off to college, leaving their after-school moving business behind. Before that, she was a systems analyst. “It’s a wonderful feeling,” Sheets says of running her business and watching it grow. “It’s so fun it was like not even working.” Sheets says one of the most rewarding things for her is being able to provide others with good jobs. She started franchising Two Men and A Truck in 1989, and the company now has about 190 locations.

Because so many women have already spent years in the work force by the time they’re ready to take the leap, becoming a franchisee is a great way for them to jump into business ownership without having to spend several more years doing research. Choosing a franchise still requires lots of due diligence, of course, but the biggest bonus of franchising is that it’s a proven system.

For a lot of women, especially those supporting a family, knowing they won’t have to make the same mistakes the franchise’s founders did is key, says Sheets.

Franchising also plays to several traits women tend to have. Women are natural networkers, a skill that’s fundamental to becoming a successful franchisee. Being the new business owner in town, explains Sheets, means going out into the community to introduce yourself and attending events. Women tend to be good at networking within the business community and sustaining support systems with both men and women. Women with a nurturing side tend to excel at customer service -- something on which a franchise’s success often depends. At Two Men and A

Truck, Sheets has also noticed that women are very good at managing other people, an ability that’s vital to training and retaining employees.

Nikki Sells spent 14 years as a franchisee herself, and is currently vice president of franchise development at Tasti D-Lite, a soft serve frozen dessert franchisor. She’s seen firsthand some of the strengths and weaknesses women and men bring to the table as franchisees. “When [women] find the right brand for themselves, that passion transfers [to the business],” says Sells, who believes that women have the ability to be passionate about whatever business they own, be it a frozen yogurt shop or a janitorial service. “They’re great ambassadors for their brands. They talk about it, they live it, they breathe it.”

Another advantage of franchising is that it gives women a way to leave the corporate world behind and take charge. “Franchising offers [women] that opportunity to really create their own destiny and call their own shots,” says Sells, who believes that in the corporate world, women still face real obstacles in some industries. As franchisees, women have the opportunity to own their own progress 100 percent -- be it success or failure.

One reason both women and men are drawn to franchising is the flexibility it provides, as franchise systems of all kinds allow franchisees to work from home, part time, or flexible hours. Even though the numbers have changed drastically over the last few decades, more women than men are still primary caregivers in households. Being in charge of their own work schedules gives women the chance to have more balanced personal and professional lives. And being the primary caregivers all these years has also given women an advantage in business, says Sells: They’re really good organizers.

An area some women need to work on, Sells cautions, is finances. She’s seen a lot of women who aren’t financially prepared to open a business. In the past, it was easier for women to get loans, since they’re considered a minority in business. But with the recession in full swing, even the Small Business Administration has cut back drastically on its lending. Women who are thinking of becoming franchisees need to take a close look at their personal finances -- the sooner the better. Advises Sells, “Know how much money you have to invest, make sure your credit is really good, and make sure that you’ve got enough cash upfront to invest in the startup fees you need.”

Carrie Brenner is a writer and editor based in Southern California.

For further information visit: http://www.allbusiness.com/

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