Clear Goals Pave Way for Results

Q: In order to grow our business I need to set some goals. What advice can you provide on the goal-setting process?

A: Goals are important to all businesses. They help focus your employees on achieving results important to the business. Careers and compensation are often linked to the level of goal achievement. But, if goal- setting is not done right, it can undermine the best companies.

The first step is to collect and analyze key data that relates directly to your customers. Learn from your past performance. Do your market research. Clearly state your needs and ensure everyone agrees that these really are needs. For instance, your need might be to fill some key, specific, open positions in your sales group.

Goals should inspire and guide action. If they are not clear and accurate, their purpose becomes blurred and they cease to be something you want to accomplish. Define them so well that employees know where the start and finish lines are located.

The specifics must be measurable. If not, you will not know where you are or whether you have finished. Your goal might be to hire 10 experienced sales employees between now and the end of the year.

Are your goals doable? They can be a stretch but employees need to know the reasons a goal is achievable.

The building blocks of goal-setting need to be logical and understandable.

Business owners should realize that not everyone may share their level of extreme commitment. Sure, top performers are often inspired by stretch goals. But goals that are clearly beyond a reasonable expectation of success are even worse than too-easy goals - they can actually damage your company's energy.

Goals need to be consistent with other current or envisioned goals. If not, retool before setting your goals in concrete. For instance, you might have a goal of increasing sales by 25 percent, and that's why you need the goal of increasing your sales staff.

Make goals your servants and not your master. It's important to strive to reach your company's goals, but if obstacles occur, treat them as learning opportunities and then make adjustments. Expect learning to be a major benefit of working to achieve goals.

Advice for setting your prices

Advice for setting your prices
Published in the July 5, 2015  in  

Q: My prices don't seem to be competitive. What should I do?
 
A: Setting prices for products and services should be simple - cover costs, make a profit and appeal to customers. But there are more variables to the pricing formula than many small-business owners may realize.

"When you're starting out, you may not have a good handle on all the costs you'll incur," observes Janet Attard, founder and owner of BusinessKnowhow.com. "Unless you have previous experience estimating jobs in the same industry, you may have difficulty making accurate estimates of the time and/or materials needed to complete jobs. You also may not account for non-billable hours - the time you spend marketing and Other costs of doing business may also be overlooked, until you have to pay them. These include payroll and self-employment taxes, fees for accepting credit cards, health insurance and other benefits, and a variety of overhead expenses.

Yet even after all those costs are accounted for, a seemingly fair price may not gain traction with customers.

"Prices are market-driven, not cost-driven," former executive and veteran SCORE Houston mentor Raj Mashruwala explains. "It doesn't matter what your costs are because the market doesn't care. What matters is if you can make a profit at a price the market will bear."

Mashruwala also recommends researching online industry benchmarks for gross profit margins. He also cautions new entrepreneurs to avoid the frequent mistake of underpricing their products and services in order to lure customers.

"Rather than getting a toehold in your business, you're actually giving competitors an advantage, because there's no way you can survive for the long term and meet your clients' expectations by pricing under the market," he says.

Attard also says, "Discounting can lower the perceived value of the product or service, or make the customer think you lack the experience or resources to do the job. If you underestimate costs, or overestimate sales volume, the outcome will be reduced profits or a loss."

Once you do establish a reasonable pricing structure, make it a point to review it several times a year. Customers and competitors are watching pricing trends, so don't risk being left behind.

A good place to go for more information on product and service pricing is www.score.org, click on the Marketing tab and then Price Strategy, where you will find online webinars presented by SCORE volunteers with expertise in this area..

Engage employees to keep them creative

Q: How can I get my employees to be more creative in improving our business?

A: To ensure success, a small business needs to have its employees fully engaged and committed to the owner's vision from the beginning. The whole really is greater than the sum of its parts, and one employee's creativity is sure to stimulate new ideas among others. It's a self-sustaining cycle that only gets better and adds value with time.

Creative environments are particularly important to millennials, the 80 million people born between 1980 and 1995 who soon will dominate the workforce. Millennials already have an edge over their elders in terms of their savviness with technology, cultural trends and connecting with their peers (who are your current and future customers). There are ways you can foster a creative environment to get the most from your employees, regardless of age.

Be flexible. Not all people do their best work between 9 a.m. and 5 p.m. Whenever possible, allow employees some leeway in their work hours. This also includes allowing them to work from home or elsewhere during the week. They also must be willing to show flexibility, however, such as being available for meetings when necessary.

Communicate early and often. Employees are more willing to give 100 percent when they know and believe in the reason for doing it. Regularly share what's going on in the business and the market. You can't always tell employees everything, but honesty from the boss goes a long way toward building trust. Encourage employees to contribute ideas and insights. If an idea sounds promising, let the employee who offered it take the lead if possible - or at least explain why not gently, and ask the worker to keep those ideas coming.

Be a coach, not a supervisor. This is particularly important for younger workers, who are experiencing many aspects of the working world for the first time. Give them the training they need to feel comfortable about doing their jobs and confident in taking the initiative. Sure, they'll make mistakes. By fostering a regular dialogue with your employees, you'll know better what happened and why, and what they can do to improve.

Keep resources up to date. Without investing in every technology, stay as current as possible so that employees will have the best tools available to do their jobs. Your millennial employees may be ideally suited to investigate new technologies and help determine whether it's better to upgrade or wait for something better.

Business plan can boost odds of success

Q: Why prepare a business plan? I'm very experienced in my field and don't need financing. My uncle says I have a good idea and should just get started before somebody else beats me to it.

A: The need for business planning is all about managing risk. The greater the risk, the greater the need to investigate, research and think through all relevant aspects of starting or operating a business.

Some business ventures or situations carry little risk. Maybe your business gives you a nice, stable income, you don't particularly want or need to grow, or you and your employees could survive if your business suddenly shut down. In those cases, you may not need a formal business plan, and need only keep your eye on your market and on others who could affect your business.

But the more you are risking, in terms of dollar investment, time spent deferring something else you need or want to do, or maybe forgoing income for your family, the more you need to formalize your plan.

Veteran SCORE counselor and small-business owner Matt Fitzgerald says: "The value lies in the process of researching and thinking about your business in a systematic and critical way … not in producing a finished document."

Avoiding mistakes

You'll need a document, though, to share your ideas and plan with others. The plan is not only important for starting up, but for running the business as well. It takes time now, but can avoid costly, perhaps disastrous, mistakes later.

For startups, it gives you an indication of how successful you might be. For existing businesses, it tells you the condition of your operation. Can you take advantage of opportunities that may arise or deal effectively with challenges that may occur?

You can start or run a successful business without a business plan, and you can fail with a good one. An appropriate plan just increases your chances of success.

SCORE counselor

Fitzgerald suggests a thorough review of a business plan from someone like a SCORE counselor. "Getting a third party to serve as a sounding board will provide valuable, unbiased feedback on how to improve things, look at the plan from a lender's or investor's perspective, and raise questions you may have overlooked," he says.

Fitzgerald will teach a SCORE workshop on business planning on June 16. Learn more and register at www.scorehouston.org.

SCORE seeks volunteers to help small business

Published in the May 22, 2015

Q: How can I volunteer some of my time to help small business owners start and grow their businesses?

A: SCORE is a nonprofit association where you can volunteer to share your business experience, give back to your community, gain satisfaction from seeing others succeed, and connect with like-minded people. Each year, SCORE volunteers touch thousands of lives, sharing their knowledge and experience so that entrepreneurs can realize their dreams of business success. 

Nationwide more than 11,000 men and women in 320 SCORE chapters donate their time and talent to assist America's small businesses. At SCORE Houston, volunteers provide free, confidential one-to-one and team business mentoring and low-cost training workshops and seminars. We now counsel aspiring entrepreneurs at 12 locations and we teach about 130 workshops each year in 16 locations around the Houston area.

Whether you have owned your own small business, come from a large company, are retired, are a college student, or just have a sincere commitment to helping small businesses or volunteering, there is a place for you as a SCORE Houston volunteer.

Whatever their background, SCORE counselors share a belief that small business owners are more likely to succeed if they have business mentors to guide them. We are seeking new volunteers of diverse backgrounds and experiences to complement and grow our team of 105 volunteers in the Houston area. 

SCORE volunteers can contribute their time in different ways. 

Many are business mentors who meet with our clients to help them with business plans, apply for financing, and grow their businesses. But, being a large service organization, we require administrative, technical, and management functions so we can provide our client services. 

Much of our work can be done in the evenings or weekends from anywhere. 

So, there are lots of ways a volunteer can help SCORE help other people.

New members go through an orientation program to get familiar with SCORE and comfortable with the counseling process. All members stay up-to-date by attending regular monthly training sessions.

In Houston, we share offices and work closely with the U.S. Small Business Administration. We have twelve satellite locations throughout the city and are looking to establish more. Visit our website, www.Houston.SCORE.org. 

If you have questions or would like to volunteer to help people achieve business success, please e-mail us at scorehouston@gmail.com, or, call our office at 713-487-6565.

Workshop explores options for starting a business

Published in the May 10, 2015 

Q: I want to get started in a small business, but I can't decide among buying an existing business, operating a franchise or starting from scratch. Can you suggest anything? 
A: There are a number of ways of getting into business, each with its pros and cons. Fortunately, there's a free workshop coming up that can help you sort through the alternatives. SCORE and Capital One Bank have partnered to present the "Business Alternatives for the Entrepreneur" workshop scheduled for 9 a.m. to noon Thursday at the Kingdom Builders' Center, 6011 W. Orem Drive. This is one of a series of workshops designed to help small businesses survive and thrive.

The workshop has three parts.

1. Diana Trondsen, FranNet Franchise Consultant, will show you how to search for and evaluate franchise alternatives. Trondsen has more than 15 years of experience in single- and multi-unit franchises.Trondsen will help you explore the franchise opportunities and options that can meet your budget for entry while maximizing your earnings. She will take you through the process of choosing a business that will fit you well and give you control over your finances and plans for retirement. Learn why it is so important to make the right choice upfront and how to go about finding the right fit for you.
   
2. Mike Fadden, SCORE mentor, will help you explore whether you should start a new business or buy an existing one. Fadden has been involved in the startup of three companies and has business acquisition experience. He will review the 10 most important factors you need to consider in evaluating acquisition options. Sample topics include: What management experience is required? Is funding one alternative easier than funding another? Will you control your own destiny? What are the business valuation metrics?
   
3. Neil Polansky, of the city of Houston's Business Solutions Center, will discuss specific business operating requirements including "doing business as" designations, state sales tax permits, federal taxpayer ID numbers, appraisal of business personal property (rendition), financing options, deed restrictions, the Texas Deceptive Trade Practices Act, city contracting basics, and the Hire Houston First and Liftoff Houston programs.

At the workshop you also will have the opportunity to meet one-on-one with a SCORE mentor to discuss your situation and network with other small-business operators who are facing similar challenges.

Awards program includes small business tips

April 26, 2015

Q: Where can I go to network with other small-business owners and lenders, and pick up some pointers?

A: I suggest attending the 2015 Small Business Awards Luncheon/Workshops/Expo hosted by SCORE Houston. This year's event will be on May 7 at the JW Marriott Houston, 5150 Westheimer, in the Galleria area.

The U.S. Small Business Administration will present seven of Houston's best small-business entrepreneurs with prestigious awards including the Small Business Person of the Year. The keynote speaker will be Sallie Sargent, president and CEO of the Houston Super Bowl Host Committee.

Before the luncheon, SCORE will conduct two small-business workshops.

"Creating an Intentional Culture": Liz Lara-Carreño, outreach program director for the Goldman Sachs 10,000 Small Business Program at Houston Community College, will discuss how to gain and retain a competitive edge by aligning the environment, communications and emotional drivers to a company's strategic vision and brand.

"Email vs. Social Media: Which One is Right for Small Business?" Business coach Toni Harris will discuss how the various social media platforms fit in your business; which platform has the best return on investment; and how to determine which tools are effective at growing your business.

At the event you also can visit exhibits and network with sponsors, representatives of banks and other lending institutions, small-business entrepreneurs, SCORE mentors and other SCORE Alliance Partners. To learn more and register for the luncheon and workshops, visit www.scorehouston.org.

Marvett Sawyer Howard will receive the 2015 Financial Services Champion of the Year Award for her work fostering the development of the Houston small business community. Howard is the assistant vice president for community development banking at Capital One Bank.

Among the many programs that she directs or helps coordinate is Capital One's "Getting Down to Business" Program. This is an innovative technical assistance training program designed specifically for small businesses with annual revenue of less than$1 million.

The program is free and features a multicourse in-depth curriculum, offered over eight months. Capital One will match funds that participants deposit in a savings account up to $2,000, which the business owners can use for operations, staffing or the purchase of supplies upon completion of the program. Deadline: May 5. Apply Online Now.