Sooner or later in everyone’s working life we pose the question “If I’m so good at what I do and produce good business and profits for my employer, why can’t I do this for myself?”
Then it becomes a question of confidence and – to a great degree – courage in taking your financial resources and laying them on the line, knowing that there is always the seed of doubt saying “What if I get it wrong?” But countering this, there is always the hope that you can create something which, if it is successful, can afford a better lifestyle for yourself and your family.
A small business is usually run by a few people who have to take on a number of roles, who often have a personal financial commitment in the business, and whose success depend on results, not just the time that is spent in work.
The personal bond between the owners and staff must be essentially a strong one. Without sounding trite, it must encompass mutual respect and the realisation that everyone is working towards a common goal.
There are no numbers in small businesses – names and individuals is what it is all about. And there is no room for the blinkered attitude found in large firms of “it’s not my job.”
In a small firm, staff must be flexible in their working arrangements and have a belief in the business, which cannot just be looked at as a “job”. There must be good relationships between the owner and staff, and working as a team is essential to achieve these objectives. All members of staff must be ready to take on responsibilities outside their usual functions.
And people who run small firms need to be multi-talented, flexible and very hard working. Staff loyalty is vital in small business. Customers expect a better and more personal service than they do from large organisations. Courtesy and a willingness to work are essential at all levels.
A small business owner must always be alert to market changes and be planning well ahead. Too much reliance on one large company to provide work can be very dangerous. Small businesses can adapt more quickly to the market as decision-making is not burdened by the hierarchy of a large business – this is particularly true in the leisure and tourism market place.
A small business has to value every customer. A large firm can afford to simply choose not to deal with certain customers. Conversely, a small amount of payment defaulters can much more seriously affect a small business, so care is required in that direction. The small business has to be constantly aware of market trends and anticipate demand, whereas to a large extent big firms can create demand.
The importance of the owner is paramount. Their workforce must have the confidence in his or her business skills and the ability to render decisions for the continued well-being of the firm. However, sometimes difficult or unpopular decisions have to be made - it goes with the territory. Honesty with oneself, the workforce and clients is of ultimate importance as is a well-developed sense of overall justice and an ability to laugh at oneself and be humble enough to admit mistakes.
If the owner does not make the business tick, then it will fail. The owner must know their market inside out and has to be a “jack of all trades”. The owner must have the ability to carry out an on-going assessment that what you are offering is what the market wants. Having the flexibility to change quickly, monitor customer reaction, take advice as required and keep tight financial control are also crucial elements.
The owner’s contribution and participation is vital to success. In the absence of a full, professional management team, the owner is required to take all-important decisions and is relied on to maintain morale. People-management skills are very important unless the business either involves very few participants, or has a large staff turnover and obviously the latter is undesirable.
Small is beautiful and the decisions small firms make are based on personal experience, access to market research, and advice from professional advisors.
They have the flexibility to change tack to meet changing or new market needs quickly. The decisions they make in the next 12 months will directly have a bearing on their profitability and will ultimately determine their ability to continue to trade. What better incentive do they need to get it right?
They have the advantage of freedom over large firms because they have no management team, board of directors, or shareholders to answer to. They can make instant decisions and these are final. That is not to say that every decision they make is the correct one, but there is much advantage in being able to make a major decision without having to spend time consulting with others. Basically if they spot a trend, they can respond instantly.
In contrast, big business employs people to carry out specific tasks and there is often little incentive to put in more than is required within a set working pattern or to carry out functions for which they are not paid. But one big problem in a small firm is that professional advice or particular expertise is not often available in-house and has to be brought in as required.
A small business uses all of the management skills required by big business, however it does not have the luxury of appointing a specialist for each task.
A small business, by virtue of the fact that it is small, does not usually have a large marketing budget so it is essential that the owner is highly astute and precise in identifying potential markets. Large business is more concerned with corporate image while a small firm is concerned with the image, which the individual and the workforce present, as well as the products it offers.
Thursday, 28 May 2009
Thursday, 14 May 2009
How To Harness The Power Of Brand Management
Although it is possible to dress it up in different subtle words such as the ‘drive for shareholder value’, at this moment in time, many businesses of all sizes are simply struggling to make money. Many are cutting back on costs, some are reviewing product investment, and most are slugging it out to win the very few sales that are around.
In some parts of industry, however, business leaders are also taking a closer look at a well-proven method of creating value: brand management.It is surprising that brand management is not more generally recognised to be the powerful tool that it is. It certainly has more impact than many things attempted over the past 20 years by different management teams.
During that time companies have not hesitated in reaching for passing management fashions such as ‘total quality management’, ‘process re-engineering’ or dot.coms as a means to create profit. These fads, sponsored by pundits, gurus, or the City, have come and gone, with dubious impact on organisations and their profits. But by contrast, a number of companies have managed brands, with their associated price premium, in different markets over many decades. They have shown that it is possible to create an entity which appeals to a group of customers and, over time, becomes a very valuable asset.
This flies in the face of much recent management thinking (that everything is changing fast and that price is constantly under pressure) but it is, nonetheless, true. It is astonishing that more companies have not invested extra resources and attention into what is a proven technique. Unfortunately, brand work tends to involve a wide spectrum of activities. At one end, creative companies help to design new images such as the international tail fins for British Airways or new names such as Consignia. These projects attract public attention and sometimes criticism or even ridicule.
At the other end, journalists have challenged the ethics and integrity behind brand building, suggesting that brands exploit consumers, causing them to pay more than they should for the goods on offer.
The range of experts operating in the field of brand management proliferates by the day. In addition to professional brand managers in large corporations, there are strategists, design consultants and valuation specialists. Yet it is still hard to define exactly what a brand is and as a result, many companies have ignored, to their detriment, the precious role that brands can play in the life of both companies and customers. It is therefore possible that industry might miss a very powerful, proven source of profit.
Despite the disparity of work, it is beyond dispute that a carefully designed image rests in the memory of customers and helps them to buy. We also know that numerous firms have proved that, by managing that image carefully, a product or a service will appeal time and time again to a group of interested customers. It becomes a familiar part of their life, giving them consistent benefits in their day-to-day life. As a result, they will pay a premium for this offer and develop a loyalty towards it. But this does not mean that this incremental cost is not valuable to them. Quite the opposite. Over time, they become fond of these entities and, if they think about it, regard them as part of the landscape of their life.
What starts as simple reassurance about quality or consistency becomes, on a deeper but harder to measure level, an emotional bond in a hectic modern lifestyle of constant pressure and change.
As a result there are people who feel warmth towards a tin of paint, a sugar-filled drink or sports shoes. In fact these items mean so much to them that they can be as upset and unforgiving if they think a favourite brand has been damaged, as when a favourite soap character is killed off.So why hasn’t this marvellous technique been more fully adopted by all businesses? The answer lies in the fact that truly adopting brand management often involves major changes to an organisation. The company must become market, rather than supply-driven. Customer segments need to be clearly defined and their needs understood in detail.
Branded propositions then need to be created, giving direction to sales, service and operating functions. Large firms do not typically have the political commitment to radically alter the balance of power in their internal operations in order to achieve this longer term benefit. They have to be driven there by relentless market forces, often going through traumatic management change en route. Smaller companies, on the other hand, can be daunted by the world-class power of better known brands like Coca-Cola or Nike. They forget that many successful brands, such as Uniliver, Virgin or Body Shop, were built from scratch by business leaders with very modest initial resources.
However, whether brand success has resulted from vision as with Mars or luck in terms of Virgin or the ravages of the market as has happened with the motor industry, the steps needed to succeed are well-known.
It is possible for any sized firm to create a brand which customers prefer and pay a premium for over many years. But first they must first understand the key customer groups; second, understand their rational and emotional needs; third, design a clear, unique proposition; and fourth, deliver consistent, reliable benefits over time.In order to thrive, companies of all sizes need to take a hard-headed look at brand management. This has been shown in different sectors of the world to produce real value over time and guard against the ravages of the market.
In some parts of industry, however, business leaders are also taking a closer look at a well-proven method of creating value: brand management.It is surprising that brand management is not more generally recognised to be the powerful tool that it is. It certainly has more impact than many things attempted over the past 20 years by different management teams.
During that time companies have not hesitated in reaching for passing management fashions such as ‘total quality management’, ‘process re-engineering’ or dot.coms as a means to create profit. These fads, sponsored by pundits, gurus, or the City, have come and gone, with dubious impact on organisations and their profits. But by contrast, a number of companies have managed brands, with their associated price premium, in different markets over many decades. They have shown that it is possible to create an entity which appeals to a group of customers and, over time, becomes a very valuable asset.
This flies in the face of much recent management thinking (that everything is changing fast and that price is constantly under pressure) but it is, nonetheless, true. It is astonishing that more companies have not invested extra resources and attention into what is a proven technique. Unfortunately, brand work tends to involve a wide spectrum of activities. At one end, creative companies help to design new images such as the international tail fins for British Airways or new names such as Consignia. These projects attract public attention and sometimes criticism or even ridicule.
At the other end, journalists have challenged the ethics and integrity behind brand building, suggesting that brands exploit consumers, causing them to pay more than they should for the goods on offer.
The range of experts operating in the field of brand management proliferates by the day. In addition to professional brand managers in large corporations, there are strategists, design consultants and valuation specialists. Yet it is still hard to define exactly what a brand is and as a result, many companies have ignored, to their detriment, the precious role that brands can play in the life of both companies and customers. It is therefore possible that industry might miss a very powerful, proven source of profit.
Despite the disparity of work, it is beyond dispute that a carefully designed image rests in the memory of customers and helps them to buy. We also know that numerous firms have proved that, by managing that image carefully, a product or a service will appeal time and time again to a group of interested customers. It becomes a familiar part of their life, giving them consistent benefits in their day-to-day life. As a result, they will pay a premium for this offer and develop a loyalty towards it. But this does not mean that this incremental cost is not valuable to them. Quite the opposite. Over time, they become fond of these entities and, if they think about it, regard them as part of the landscape of their life.
What starts as simple reassurance about quality or consistency becomes, on a deeper but harder to measure level, an emotional bond in a hectic modern lifestyle of constant pressure and change.
As a result there are people who feel warmth towards a tin of paint, a sugar-filled drink or sports shoes. In fact these items mean so much to them that they can be as upset and unforgiving if they think a favourite brand has been damaged, as when a favourite soap character is killed off.So why hasn’t this marvellous technique been more fully adopted by all businesses? The answer lies in the fact that truly adopting brand management often involves major changes to an organisation. The company must become market, rather than supply-driven. Customer segments need to be clearly defined and their needs understood in detail.
Branded propositions then need to be created, giving direction to sales, service and operating functions. Large firms do not typically have the political commitment to radically alter the balance of power in their internal operations in order to achieve this longer term benefit. They have to be driven there by relentless market forces, often going through traumatic management change en route. Smaller companies, on the other hand, can be daunted by the world-class power of better known brands like Coca-Cola or Nike. They forget that many successful brands, such as Uniliver, Virgin or Body Shop, were built from scratch by business leaders with very modest initial resources.
However, whether brand success has resulted from vision as with Mars or luck in terms of Virgin or the ravages of the market as has happened with the motor industry, the steps needed to succeed are well-known.
It is possible for any sized firm to create a brand which customers prefer and pay a premium for over many years. But first they must first understand the key customer groups; second, understand their rational and emotional needs; third, design a clear, unique proposition; and fourth, deliver consistent, reliable benefits over time.In order to thrive, companies of all sizes need to take a hard-headed look at brand management. This has been shown in different sectors of the world to produce real value over time and guard against the ravages of the market.
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