6 Step Plan to Keep Your New Year’s Resolutions

Plan to Keep Your New Year’s Resolutions

BCS ProSoft Selected to Accounting Technology’s 2010 VAR 100 list

BCS ProSoft Selected to Accounting Technology's 2010 VAR 100 list

R.I.P. The MIS Group

Last month one of our biggest competitors in the Texas market suddenly closed their doors, orphaning hundreds of clients and leaving employees jobless and scrambling. Some might cheer the loss of a competitor, but I am deeply saddened by the loss. I am sad for the customers that have to find a new Sage Business Partner when they need to remain focused on generating revenue and controlling costs. I am sad for the employees and their families that depended on MIS for their livelihood. I am also very sorry to lose a strong competitor because I believe that competition expands the market and makes all of us better business people.

I’ve spent the past 3-4 weeks thinking about what happened to MIS Group and I believe there are some lessons to be learned from their failure:

1. Don’t over extend yourself – MIS fell into the same trap as Chrysler and GM. They assumed that business would continue to expand. They neglected to plan a strategy for a “worse case” scenario. This included not reserving capital to carry them through if the worst was to occur. I encourage you to consider this when you begin the budgeting process each year (you are producing budgets and forecasts aren’t you?) Plan for how you would respond if your revenue was to be double that included in your projections. Next, decide how you would respond if your revenue was only half of your projections. This optimistic/pessimistic approach will better prepare you to deal with these scenarios when they occur.

2. Be nimble – Business is not static and companies that survive are able to adjust quickly to changing economic conditions, technology shifts, and customer requirements. You should be able to adjust your business model on the fly, based upon current conditions, adjustments in future projections, and industry trends. Inability to adjust quickly to real time information is a strategy for failure. Everyone repeat after me: “Change is good…change is good…change is good…”

3. Prepare for the future – A smart business person is constantly looking for ways to be better prepared to take advantage of future economic conditions. I believe it is a huge mistake to bury your head in the sand while waiting for the economy to improve. I guarantee you that your competitors are positioned to strike if you take this approach. Now is the time to work on your business processes, train your staffs and look for better tools that can help you increase efficiencies and lower costs. Doing so will put you ahead of the competition when the upturn in the economy does occur.

R.I.P. MIS Group. We are sorry you are gone, but we will learn from your failings. Companies that do not plan, execute, and adjust on a daily basis are doomed to fail. In your honor we will redouble our efforts to proactively help our customers survive these tough times and prepare for the future.

If You Don't Take Care of Your Customers, Someone Else Will!

If the bad economic news has you paralyzed, we’ve put together a three step recovery process that will help you survive during slow times and allow you to prosper in good times. It has to do with your #1 asset — your customer. If you’re not paying extra special attention to your customers right now, I can guarantee you that your competitors are and if you’re not careful, your customer will be their customer. If you’re stuck in economic paralysis or looking for ways to improve your business, right now, read on.

Step 1: Take Stock. The first thing we need to do is take account of our customers. Who are they? Are they happy with us? Will they buy from us now and in the future?  Can we use them as a reference? Would they recommend us to their peers? It is time to recognize that the greatest asset we have in our businesses is our customer base. Properly nurtured and managed, they will sustain us during the recessionary periods and enable us to grow in strong markets.  Let’s get to work answering these questions.

Step 2: What you can Measure you can Manage. If feels a little like “survey” time, doesn’t it? Well, yes and no. Standard surveys, whether administered internally or via an unbiased source provide you with some information, but no real understanding of what the responses mean. I would recommend that you look at the measurement methodology developed by Satmetrix, Bain & Company, and Fred Reichheld. Net Promoter (NPS) is a method of scoring our customers that was first discussed in the book The Ultimate Question by Fred Reichheld. Net Promoter is both a loyalty metric and a discipline for using customer feedback to fuel profitable growth in your business.  The Net Promoter Score is a straightforward metric that holds companies and employees accountable for how they treat customers. It has gained popularity thanks to its simplicity and its linkage to profitable growth. When implemented properly in an organization and all employees are engaged, it can open the door to customer-centric change and improved performance.

argued that there are more efficient methods, but they’ve implemented a method that works for them. You need to come up with some way to track customer activity as well. If you’d like something better than a 3X5 card, there are a number of solutions out there that can simplify and streamline your process. Be careful not to get paralyzed by the analysis and planning for CRM. You can add complexity over time; just make sure you’re able to track critical customer information along with future and past activities. The last critical piece you need is some way to get relevant data back out so that you can be proactive.

Step 3: Customer Relationship Management. Whether you use a Big Chief pad & #2 pencil or a sophisticated software solution, you need some way of managing the activity with your customers and measuring effective activity proactively. Quick story: Every time I go to Southern California on business, I stay at a small beachfront hotel in Laguna Beach called “Casa del Camino”. It’s not particularly fancy and the rooms are rather small, but I am a loyal patron and recommender. Why? From check-in to check-out, they treat me like I truly matter! Their CRM system (3X5 note cards) is a little antiquated and it could be argued that there are more efficient methods, but they’ve implemented a method that works for them. You need to come up with some way to track customer activity as well. If you’d like something better than a 3X5 card, there are a number of solutions out there that can simplify and streamline your process. Be careful not to get paralyzed by the analysis and planning for CRM. You can add complexity over time; just make sure you’re able to track critical customer information along with future and past activities. The last critical piece you need is some way to get relevant data back out so that you can be proactive.

Managing customer satisfaction is important, regardless of the economy, but if you’ll take the time to gather information about your clients, determine the net promoter score for your company, and implement a plan to build that score over time, you’ll find that your customers won’t move to competitors and your profits will improve. 

Drip, Drip, Drip...Is that the Profit Leaking out of Your Warehouse?

Like that leaky sink faucet, shipping mistakes and inventory control issues don’t really seem like a big deal when you think about each individual drip, but over the span of a month or a year, the costs can be staggering. You don’t believe me? Let’s assume that you’re shipping department is pretty efficient and you only experience a 2% error rate (you are tracking your accuracy rate, aren’t you?). If you ship 50 packages per day and if we assume 250 shipping days per year, that’s 12,500 packages per year. If the average mistake costs you only $100 (overnight shipping, customer satisfaction, etc.), that’s 250 mistakes per year, or $25,000 that could have been going to your bottom line and shipping mistakes are just the tip of the iceberg! There are many opportunities to stop the leaking that is going on in your warehouse.

So where do you start? The first thing you should do is take a walk through your warehouse and look for mistakes and inefficiencies. Don’t just walk through the warehouse, spend a little time out there — learn the processes that are currently being followed and look for ways to improve. If you think your warehouse ONLY has inventory in it, you’re missing the point. The warehouse is a hubbub of activity with people and products moving in all directions. Whether you can see it or not, there are big dollar signs in lock step with all that movement. How much effort is required in your warehouse to locate a product, pack it, and ship it?

What are some of the factors that contribute to all the running around? Well, obviously inventory accuracy, visibility and transparency are key to making the right move the first time. Utilizing electronic tracking technologies is critical to improving accuracy and immediate access to vital data. In addition, these technologies enable you to do the job one time, say at the receiving end, and have those efforts pay dividends in the stocking, picking, packing, shipping, and invoicing processes.

Everyone’s warehouse is unique so I can’t estimate your potential savings from efficiency improvements, but double digit efficiency improvements are certainly attainable. Drip, drip, drip.

Optimize your inventory to cut costs. When inventory accuracy is lacking in a warehouse, the tendency is for the purchasing manager to order more “safety” stock. This, of course, leads to costs leaking all over the place...obsolete inventory, write-offs, lost inventory, warehousing insurance, extra labor and handling, etc. Starting to see the leaks in your systems?

 Consider using EDI to get access to the BIG BOYS. Perhaps you have, or want to have, relationships with larger trading partners that require label compliance and the use of EDI. The good news when you get invited to the party is that your business volume will usually increase significantly and if handled correctly, these new relationships could provide access to other big purchasers.

The challenge is that there could be significant charge-backs and penalties if you mess up. The big boys can and will refuse shipments if everything is not exactly as specified. They will expect you to have their requirements dialed in almost immediately, otherwise, you are costing them money and they will penalize you for that one way or another. It is paramount that your inventory and processes be spot on and you can’t show any signs of strain as your volume increases.

Again, having the right technology investments in place can provide confidence that you can supply required documents such as the UCC 128 label, the electronic advance ship notices, and outbound invoices. Absent these and other required EDI components, you will surely incur additional costs and put at risk the relationships you worked so hard to establish. Drip, Drip, Drip.

So how big are the leaks in your warehouse? $25,000, $50,000, $100,000, or more? Start observing, measuring, and thinking about how your warehouse operations can be dramatically improved with the infusion of some fresh thinking and new tools. When every dollar counts, it’s appropriate to pay attention to those leaky faucets in your warehouse — every drip that is eliminated will translate into profit at the bottom line, which is where it belongs!

The Power of Positive Thought

One of the great things about my job is that I get to speak with business people from all over North America on a weekly basis. Lately, I’ve been curious how the recession has been affecting our customers and the results are overwhelming. With few exceptions, small business across the country is doing quite well, even in the face of all the bad news (what recession?). Want to improve your outlook and improve your business? Here are five things you can do today that will make a HUGE difference:

1. Stop watching the news! I don’t want to become a media basher, but really, enough with the negativity.

2. Smile! You’ll be amazed: a simple smile will infect everyone around you.

3. Work today like you’re going on vacation tomorrow! You know what I’m talking about. Nothing is left undone before you leave on vacation. Why can’t you do that every day? It feels good to be caught up, doesn’t it?

4. Communicate with your Customers! Make a point of calling or visiting 5-10 customers every week. You’d be amazed what you’ll learn and you might just get some unexpected business.

5. Surround yourself with positive things and positive people! Don’t let outside influences (friends, family, etc.) bring you down.

Did you hear that Intel has announced they will invest $6 Billion in infrastructure improvements? That’s great news for the plant workers and contractors, but the really great news is that Intel understands that they can’t afford to sit around and wait for the economy to “improve.” They’re investing for the future and so should you! And don’t forget that BCS ProSoft can help with technology improvements and business process consulting.