Regardless of Marcellus, WPA’s Small Businesses Are Still the Best Game in Town
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth
Ponder WPA’s small business history and prognosis before Marcellus. Pre-1980, Big Steel and other corporations paid big and fast–in 30 days. By doing so, big business financed their small-business suppliers’ growth and success. But in the early eighties, steel’s meltdown soured Western Pennsylvania’s economy and delivered the main blow that knocked small businesses out of their comfort zone.
Then, in 2007 the Great Recession challenged the very survival of small businesses as credit and demand dried up. Many survived, only by financing their big businesses customers in settling for payments up to 120 days. Fast payments by big business customers became a fond memory.
To cut their costs, big businesses started purchasing through third-party buying groups, further squeezing small-business’ margins in return for guaranteed, if only break-even customers.
To cut costs further, large businesses have outsourced functions. One employee now does the work of three and forces his small businesses vendors to work more and harder without getting paid for extra service.
In response, WPA’s small businesses have indulged their customer bases by providing too much value for the money and avoiding high-risk debt and expansion beyond low-risk, opportunities with existing customers. Deprived of margins for their extra services, too many small businesses have abandoned differentiating themselves to save thin profit margins. They simply don’t charge for needed research and development or for product or service customization. Consequently, small businesses have settled for “safe,” predictable results and abandoned selling and marketing high value for the money.
And now, the Internet has fulfilled its potential, enabling big companies to buy ever-cheaper goods and services worldwide. This has further disadvantaged small businesses. Finally, nonprofits and government entities, who, apparently view small businesses as merely their funding source, continually pressure small businesses to give, give, give regardless of what they need to survive or reinvest. Small businesses must do well before giving to do good.
Social responsibility and the green economy makes sense, but can’t substitute for small-businesses’ need to exchange real value for real money. Social entrepreneurism has never substituted for paying customers.
Going forward, WPA small businesses will succeed only when it exchanges its differentiated value with customers’ money who need them to solve their problems. Thereby, they can operate independently of large corporations, non-profits and government entities.
Small businesses can abandon serving big business at any cost, and serve customers who value their expertise and experience and pay a fair premium in return for these values.
They are free to rely on themselves and extend their comfort zones beyond serving only existing customers with under-priced, guaranteed products and services.
On this new path, small businesses are running on higher margins and charging more for improving the conditions and outcomes of their customers, especially the bigger bullies. Small businesses now offer charity and pro-bono services to those who value and honor it rather than demand and devalue it.
As the economy improves, small companies are hiring, investing, and thinking in terms of years not months. They’re running on lower credit lines and avoiding financing their customers. Hopefully gone are the 100-plus days of average accounts receivable. And small businesses are raising prices on unprofitable customers.
Small businesses know that the goodwill they’ve leveraged with larger companies may be fully depreciated. The big businesses they’ve served have declined, micromanaged as they are for high-volume sales and low margins.
Company buying behavior has also changed for the better. Customers now expect to pay more for what’s related to energy and transportation and for services tied to these sectors. Charging for these services shows that the worst is past, and that small businesses can take positive steps to succeed.
The key to further small-business growth is realizing that value is dynamic, not static. It matures and declines over time. It’s up to small businesses to fulfill customer needs as they emerge without relying on outside forces to improve their condition and to immunize them from value volatility. And that’s without even considering our impending trillion dollar Marcellus windfall!
Marcellus Lesson 6: What Can You Do Until Marcellus Heats Up?
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
When was the last time you’ve heard the old adage, “It takes 20 years to become an overnight sensation?” Lately I have been feeling this snappy line really applies to the Marcellus Shale boom! The inflection point when Marcellus really takes off won’t take a whole generation, but whenever the shale boom explodes, it will probably surprise many of WPA businesses just as any overnight success would. So, if you take this attitude, I suggest that waiting for a clear sign of when to invest your time, money and energy to grow your Marcellus business is a waste of your time and passion. Why? Because, just like all the breakthroughs we dream of and love to see, they never come exactly when or how they are expected.
For every positive sign like the new $1 billion Shell cracker plant, there are equally dismal predictions that the price of natural gas will never rise to make it profitable.
But I am an optimist (and there is far more evidence supporting an inevitable economic boom) so, as in all other parts of our lives, let’s be realistic and accept that we can never control the timing or the actions of others, but we can control our planning and our reactions to an expected boom.
So what reactions to an uncertain timing of the Marcellus Boom can we as business owners plan and control?
We can be deliberate in our planning and execute our intentional reactions, which, we should be doing anyway! So, if you want to know if you should grow your business when the shale gas boom hits, please ask yourself the following questions:
Do I have experience doing business in WPA?
- Do I need to find new markets and customers to grow my business?
- How many new customers have I met and sold in the last three years?
- Has my business reinvented itself under my leadership?
- Have my employees and I changed responsibilities and accepted new duties in the last five years?
- What new expertise have I recently gained in selling to the energy sector or any new industry?
I believe that energy money flowing into the WPA economy can mean opportunity for my business. I am growing convinced that the timing and the nature of the opportunity is not the real challenge that we as WPA business owners face. Instead it has much more to do with whether we can seize the moment, will we seize the moment and finally how will we seize that moment? Having these questions answered will make Marcellus work for you and your business, whenever it comes and whatever it looks like.
Symptoms and Solutions: Make Your CRM Work
Filed under: Business Growth, Profitable Growth, Uncategorized
Investors, business brokers and buyers who purchase a company for its growth potential analyze the sales pipeline to determine the firm’s worth. Nothing validates future cash flow better than a documented, predictable sales forecast backed by a customer relationship management (CRM) software system.
Big corporations rely on large systems like Salesforce.com to prove predictions of future earnings. They plow millions into developing sales processes, software, training, quality data and the management of sales teams who enter, follow-up and document their results.
You, the owner, can create a better sales pipeline on a budget through your CRM. To grow your business more predictably or sell it for a premium, you need to prove that future sales will happen.
Here’s a chart of the common symptoms, root causes and solutions of why your CRM may not predict sales:
CRM Symptom |
Root Business Causes | Solution |
| Little predictability or information on when and if sales opportunities get closed | Sales process unclear and no accountability or incentives for call reporting or management follow up | Owner documents how and why customers buy and measures activity and incentives for results |
| Company rainmaker(s)/business owner won’t document activity or forecast their sales | Company depends on rainmaker(s) for sales, market and customer knowledge. They who are accountable to no one. | Develop sales force beyond the rainmaker/owner and team the rainmaker(s) with an admin assistant or inside customer-support person |
| Prospecting dismal because sales reps “have no time to hunt.” Spend their time servicing existing customers, | Undervalued/disrespected inside sales/customer service department and weak sales management | Reward inside sales/customer service for upselling/cross selling existing customers. Change outside reps’ compensation to favor hunting |
| Sales force complains that gatekeepers and voice mail make prospecting a waste of time. | Company’s value proposition, marketing and lead generation flawed | Assess whether company’s go-to-market strategy is still effective and if so, whether sales force is effective or deficient |
Remember these 5 points to help your CRM generate better forecasts:
- Develop a process for how your business finds, keeps and grows customers. Otherwise, you’ll get an automated version of the status quo. Let best practices guide the CRM development.
- Make sure existing customer data are useful and used to make decisions. New systems use existing information more effectively, but only users create new information.
- Outgrow your manual or legacy system. It’s OK to wait longer. Whatever you buy will become obsolete, too.
- Have staff agree on what it needs to do and build an achievement plan. Then talk to a technology vendor or consultant. Without assessing your needs, you’ll buy what they sell and not what you need to achieve your plan.
- Technology is a means to your goal to grow customer sales, not vice versa. CRM systems can integrate the functions, activities, tactics and programs that comprise a firm’s sales, marketing and customer service departments. They’re generally reliable and technically will perform.
Your responsibilities as a business owner are to define your company’s process for finding, keeping and growing customers and to assure your sales force has clear goals supporting a sales forecast. Your company’s profitable growth and eventual sale depend on this.
Andy Birol, Veteran Business Growth Consultant, to Deliver October 6, 2012 Keynote at IMC’s International Conference “Grow”
Filed under: Business Growth, Pittsburgh, Uncategorized
For Immediate Release
April 13, 2012
Washington, DC – The Institute of Managment Consultants USA (IMC USA), announced that Andy Birol, Founder of Pittsburgh based Birol Growth Consulting (www.andybirol.com), will deliver the keynote address on October 6th 2012 in Orlando, Florida at IMC’s International Conference, “Grow.” In his keynote, titled ”Crossing the Consulting Valley of Death: Lessons and Learnings from a Lone Wolf”, he will share his personal lessons in recapturing success following business setback, breakdown, and trauma amidst financial meltdown, client bailout and family heartache. Through examples and anecdotes of setback, breakthroughs and belly laughs, Birol will describe how he navigated his 15 year-old business past these challenges and how he rediscovered his Best and Highest Use®.
Dr. Gayle Carson, CMC, CSP, Conference Co-Chair says, “I have known Andy for over 10 years and his knowledge, innovation, business acumen and genuine concern and care for his client is stellar. He is the perfect example of how a one person boutique firm can become a giant in the consulting industry.”
Click Here to read more.
Breathing Your Own Exhaust
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
If it is so wrong to stare at a car crash, then why are they so fascinating? And in these tough times, watching another crooked leader taking the “perp-walk of shame” brings a grin to even the most cordial of us. Leave it to the ever-precise Germans to define this feeling as “shadenfreude” or “the taking of pleasure in the misfortunes of others.” The more pompous or self righteous the civil servant, business titan, or do-gooder is, the more the French got it right, saying revenge is a dessert best enjoyed cold.
If shadenfreude is fun from a distance, why is it so painful to watch someone you care about become so impervious to their impact? It’s because we care. In my work, I have seen the following examples of owners breathing their own exhaust.
- After failing to eliminate his salesforce by going direct to customers, the leader invites the reps to “come back home as all is forgiven” by his marrying the youngest sales rep.
- Returning from France and bragging at work how much money he spent on wine, an owner cuts payroll and publicly borrows money from an employee.
- After kiting a client’s postal check and firing his partner’s son, the tables are turned when he alerts the sheriff who impounds the owner’s boat just as he’s skipping town on it.
- After showing off his new Ferrari, an owner takes me to his board room where he has taped (not framed) Penthouse centerfolds to the mahogany walls.
While the stories are horrifying, I can vouch for the good intentions and years of sacrifice that preceded each owner’s fall from grace. But at some point a chip switched in the owner’s head and the disconnection from reality snowballed down a slippery slope of complete self-delusion.
How can you tell if an owner’s ego and braggadoccicio have overwhelmed their confidence and conviction? What kinds of brakes and controls can you hope they embrace? It is high time when an owner
- Dismisses ideas as being irrelevant to their business when the ideas would create accountability
- Responds to questions regarding how their business is doing, by insisting there is no way to better it. Period.
- Believes that luck or being in the right place at the right time played no role in their success.
Business ownership has so little accountability and oversight that without devil’s advocates and contrarian data to strike a balance, dysfunction is likely. When owners start believing their destiny is assured, it’s more likely that things are never as good or as bad as they think they are.
Here are some simple questions to ask and assure their feet are on the ground and they are not breathing their own exhaust.
- What is their true price of being wrong?
- What is their true benefit of being right?
- Where does their comfort zone really end?
- Where does their dogma really begin?
In such crazy times, there seems to be a fine line between stoicism and irrationality. Help the owners you know to stay on the right side and remember my favorite quote, “We become what we tolerate!”
Birol Growth Consulting Helps Microseeps Grow its Marcellus Business
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
Background: Microseeps is a lab testing business located in Harmar, Pennsylvania that provides a wide variety of services supporting insight into soil and groundwater problems. Since the 90’s, the company has solved a large number of customers’ needs by developing innovative, groundwater, analytical tools and cost-effective ways to sample soil gas for vapor intrusion.
The Challenge: Although Microseeps was experienced in serving large, energy firms responsible parties, consultants and labs throughout the United States, the company lacked a shale-gas offering or specific sales effort dedicated to directly serving small customers in the Marcellus Shale footprint running through West Virginia, Pennsylvania, Ohio, and New York. The firm typically serves consultants and customers who call Microseeps technical and customer support for solutions. After analysing sales and laboratory results, however, management saw a new market opportunity emerging — the local independent testing lab. But without a sales force, or dedicated products or services, how could Microseeps evolve to serve this dispersed target market?
The BGC Solution
Andy Birol helped Microseeps conduct field, market and internal company research and analysis. Then, Tom Hill, Owner agreed to launch and fund a direct-marketing effort with online and off-line tactics to directly engage with state-approved laboratories across the quad-state Marcellus shale footprint.
“This was a big step for our company to aggressively market to a specific target prospect. We are excited to introduce this unique offer that fully leverages our companies Best and Highest Use,” said Hill, adding, “Andy guided us to discover how we could enter this market, and implement the right steps to further grow our Marcellus business.”
Specifically, Microseeps is developing an integrated. direct-mail, email, telephone and website strategy that offers an easy and profitable solution for any lab to grow its Marcellus business, whether or not it has existing business or experience serving land owners, corporations, drillers or municipalities impacted by the drilling of gas. Beyond these tactics, Microseeps is taking further steps to support its business in this space.
Results to date.
Microseeps has already grown its Marcellus related business segment with existing customers by more than 25 percent. And the new tactics promise to easily double this growing number in this emerging market. More important, early results demonstrate that a focused effort has made a sales impact and has given management the confidence to create more proactive initiatives.
“With a great year behind us and our new Marcellus and other initiatives under way, I have high confidence that the coming years will continue to be some of Marcellus’s best,” says Hill.
“Andy Birol has been of great help not just in terms of developing our Marcellus initiative, but in helping us to refocus Microseeps on creating profitable growth for years to come. I look forward to a positive ROI on his and our efforts for years to come.”
Is Your Company a Feature, Benefit or Advantage? Build Your Tech Company For What It Is…and Isn’t
Filed under: Business Growth, Profitable Growth, Uncategorized
As a stakeholder in a tech company, you have your money, future or ego in its future. Whether you own, buy from, or sell to such a firm, its hype should be contagious but could be a double-edged sword. Are you in on the ground floor of the “next big thing” or will your stake be wiped out by the next disruptive technology? Industry pundits who define success in terms of “digital immigrants”, “hyper-personalization” and “virtualization” aren’t very helpful! So how can you tell whether your tech firm is chicken-salad or chicken-scratch?
Here are three steps to decide if and how your technology company could succeed.
1. Is your firm’s product or service really a feature, a benefit or an advantage (FBA)?
• Features are the functions, specs or characteristics defining how a product or service performs. Apple’s touch-screen technology is a good example.
• Benefits are how the features help the user/buyer. The Garmin portable GPS has evolved from a beneficial product
• Advantages are what value the benefits provide the user/buyer
2. How can FBA’s help you define your tech firm’s focus?
• A feature-driven company should offer a function or tool that enables something greater to work better.
• A benefit-driven firm should sell a capability which enables its user/buyer to pursue an outcome
• An advantage-driven firm should market an ultimate condition or outcome to a user/buyer
3. Which markets, investors or ultimate buyers are best for your tech company?
• A feature-driven tech firm has the most appeal to vendors/suppliers of a greater or broader solution
• A benefit-driven company should target its product/service at end-user/buyers who will leverage it into the most profitable outcomes or value for its customers
• An advantage-driven company is most valuable to the final user/consumers who enjoy the most immediate value or highest outcome from this complete product/service.
Whether your technology firm is “pre-revenue” or “self-funding” you are proud of it and its future.
With All the Business in Technology, Where’s the Technology in Business?
Filed under: Business Growth, Profitable Growth, Uncategorized
Business people are fascinated by the benefits, profits and potential of technology. Just visit any tech event and witness the financiers, service providers and the media networking with techies to discover “the next business thing.”
But despite all this “technology-transfer”, why isn’t there more technology in business? After 15 years of consulting with more than 430 firms and presenting to or interviewing another 10,000 business leaders, I’m dismayed by how little technology actually makes it into most mainstream, medium and small businesses:
- Most inventories are still managed without RFID or other systems tied into the POS. Despite this decade-old technology being “so easy,” I still see many companies doing it by hand.
- Few companies have good CRM systems. While this software works, few customers integrate their systems with their own sales culture and process or ensure sales force commitment, crippling many users from benefitting from such new technology.
- True cost-accounting information is scarce. Ask business owners what their product or service really costs to make, sell and service and few honestly know. If they had more knowledge, they could more confidently limits test new offers and features.
- Knowledge businesses still communicate with tools from the 1900′s. Despite the many better ways to present and engage their audiences, the gap between what companies say they sell and what customers hear and buy remains enormous. Too few businesses are developing mobile apps or distance learning.
Here’s why there isn’t more technology in business:
- The culture of technology clashes with mainstream business. The technology culture values perfection of their means while mainstream business struggles to convert these means into profitable ends.
- Tech people are schooled to woo investors and grants not to sell to customers. Inventors and startups believe they must write plans to get financing before they approaching and selling customers. Customers need to be understood and served but investors want to be bought out and move on. Who is more important to business longevity?
- Associations and business-plan contests reward planning skills not results. Our schools, associations and governments reward techies more for their thinking than for their sales and profits.
- Social media often encourages engagement without closure. Blogging and tweeting without closing business is like having a fiancé for five years without a marriage.
Why should you in the technology community react or even care? Because mainstream businesses need you, your value and they have money to pay you.
Consider these 3 ways to help you put more of your technology in business:
- Make your “thing” work manually before you try to make it work with technology.
- Understand how your customers use your thing to make money, and whether it’s by selling more, spending less, saving time, reducing risk or improving their lifestyles.
- Sell some version of your product or expertise from the start while you seek investors.
Technology companies have big shoes to fill in sustaining the Western Pennsylvania economy beyond steel. Doing so takes driving their products and services deeply into mainstream business.
Through this column, I will provide you with ways and ideas to do so. Together, we can put more of your technology into business.
Get Your Loving at Home; He’s No Hugger!
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
Have you ever wondered what would happen if you cut out all extra service and personal touches from your business? Would customers still come if you were excellent but detached? My recent shoulder surgery was an in-your-face experience of how this works.
After enduring shoulder pain for a year, an MRI confirmed that my rotator cuff was ripped apart. I found Pittsburgh’s best surgeon, and after a 15-minute consult, he booked me. 90 days later, I arrived for the surgery, and was quickly processed, IV’d, gurneyed and staged for the operation. No visit from the surgeon, little small talk from the nurses, and no remorse for their 2-hour delay in pre-op.
When I objected, they sedated me to ensure my compliance and placed me in the queue. The surgeon never visited before or after the procedure, and three hours after the operation, I was sent home to heal. A week later I had my ten-minute follow-up with the surgeon. Running out of time with more questions to ask, I tempted him with the only lure I had. I suggested that he operate on my other shoulder. At this, he gave me another ten minutes, satisfied all my concerns, and recommended scheduling the next one before the summer.
How did this make me feel? Am I a happy customer? What business lessons did I take away from this experience?
I am happy with my surgeon and the results to date. Yes, I felt deprived until I accepted that when it comes to surgery, I’d better get my loving at home. My surgeon and the procedure have my highest recommendation. If anyone needs a shoulder surgeon, call me at 412-973-2080, and I’ll put you in contact with the best one I know.
So what lessons can we learn on running our businesses in a cost-constrained marketplace where raising prices or offering more value is impossible? How do you provide your value when your market won’t pay you for it?
• If you offer a small part of the total package your customer is buying (surgery vs. a fully recovered shoulder), you must be efficient at delivering the only part you can.
• If you have to run a high-volume operation, focus all your resources on maintaining quality and efficiency at the highest volume possible and cut out any and all distractions.
• Spend your non-delivery time on generating more customers.
• Have faith that factors you can’t control — like physical therapy and patient commitment to rehabilitation — will make your work (surgery) speak for itself.
Many years ago, when I was a corporate manager, I sat in on an esprit de corps meeting during which a furious debate ensued over the impact of some corporate policy on how some employees might feel. After listening to this debate, my favorite executive stood up and said with exasperation, “For God’s sake, they can get their loving at home, we run a business here.”
Perhaps there’s a lesson for many of our businesses. Despite every efforts we make to cushion and enhance the experience we offer, sometimes it’s only about focusing on your best and highest use and letting your customers meet their other needs on their own.
Lessons Learned from Marcellus Part 4: Insights After 6 Month’s Focus on Shale
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
Not until the summer of 2011, did the Marcellus opportunity begin to make sense to me. Knowing nothing about gas drilling, energy policy or how big energy companies function, I grew increasingly frustrated by all the attention that Marcellus was attracting.
Then I recalled my Economics 101 professor’s simple message; the impact of one dollar spent in the economy is multiplied 3-10 times as it passes from each buyer to another seller. And with a trillion dollars of spending on natural gas in Western PA, the multiplier effect is mind-boggling! Every business that can do business downstream of gas drillers and their suppliers can’t help but grow as Marcellus spending mushrooms. As I conduct more workshops, media interviews and client engagements, I have observed the following progress.
• PriceWaterhouseCoopers is reporting: PWC just released a terrific white paper projecting huge growth for manufacturers serving the gas industry. Its conclusion:
o Chemical, metal and industrial product companies will see orders spike.
o Up to one million workers will be hired.
o Affordable natural gas will cut manufacturers’ production costs as well.
o Natural-gas refueling stations and evolving regulations could inhibit or slow this sector’s growth but cannot prevent it.
o The lower the cost of production of natural gas, the sooner the industry will take off.
o To access the full report, click here.
• My clients are focusing on the low-hanging fruit for their best opportunities or are already overwhelmed with demand for their products. My construction and environmental clients are seeing particularly large opportunities and real sales growth. Contact me with no obligation (412) 973 2080, and let’s chat about how your firm can participate in Marcellus.
• Interest is building: I will present workshops in Pittsburgh, Wayne, Shenango and Washington counties over the next 60 days. Click here to see which one you can attend to start preparing your business soon.
• Associations are responding: The Small and Medium Business Council’s (SMC) Dynamic Business Magazine is launching my new column “Profiting Thru Marcellus” in its January issue available soon through its site, www.smc.org
