All snow and ice management business owners want to protect their investments. Whether the company is just starting out gaining customers, driving sales, and acquiring new assets such as equipment or computer systems, or has achieved a certain level of success and is interested in retaining the benefits of their success, they share a desire to protect what they have built.
There is also the matter of protecting the business against a “perfect storm” scenario where a catastrophic occurrence takes place and could put the company’s health and welfare in jeopardy. From a vehicle accident involving employees, to a virus that wipes out your computer system, to an employee who decides to help themselves to the company’s bank account – all put your organization at risk.
How do snow management professionals protect their operation from such scenarios? By being pro-active and getting to know what is really going on with employees, vendors, the competition, and customers. It also helps to have a plan in place to respond to the challenges each and every small business faces.
Know Where You’re Vulnerable
If you ask a small business owner what keeps them up at night you might want to grab another cup of coffee and a comfortable seat because it may take some time. From how to generate more sales leads, to where can they find good people, to what will the bank say at the next review meeting, small business owners have a lot to keep them tossing and turning.
Alex Glassay, managing partner of the Glassay Strategy, a Vancouver-based consultant to small business owners, says the greatest vulnerability most small businesses have is the absence of a thoughtful and deliberate strategic business plan.
“Successful small businesses should have a clear understanding of who their customers are, what their customers need, and how they will go about satisfying their customers’ needs in a unique and compelling way,’ says Glassay. “Everything else – sales, marketing, HR and business structure – flows from this understanding.”
Small businesses need to be “unique and compelling” for two reasons: it allows customers to find your business, especially when there’s lots of competition in the market, and it helps protect prices.
“If you’re the only snow management company in town offering 24-hour on demand service, you can likely charge a higher price than other companies,” says Glassay.
Jeff Kear, co-founder of PlanningPod.com, an online business planning software program and a consultant to small business owners, says of all the departments within a company, human resources is most vulnerable since most small businesses don’t place a lot of resources or time in the process.
“Most companies simply want to hire good people who require a minimum of handholding/training and give them the freedom to do their job well,” says Kear. “They simply don’t have lots of time to spare to do things like create employee handbooks or even conduct periodic performance reviews, so these are the things that often get overlooked.”
Overlooking core human resource elements can place companies in the vulnerable position. Not being able to retain key staff members, not having a plan in place to develop future leaders and enduring high turnover rates due to poor hiring methods, all eat away at a company’s most valuable asset – its people.
Have A Good Plan
Knowing what your company is good at and what unique services it brings to the table are two characteristics all successful businesses share. Focusing on taking your service expertise and delivering it to customers with first-rate service and competitive pricing are “must have” elements to building a successful, well-run business.
These seemingly simple concepts can go a long way to help small business owners and managers design a plan to bulletproof their organization from the threats of today’s business world.
Expanding into new markets and adding new services is part of serial entrepreneur’s DNA. However, the temptation to try and be everything to everyone is risky. Stick with what got you there and find markets for your existing service lineup before trying your hand at something which can take you, your managers, and employees out their areas of expertise and out on a long, precarious limb.
Famed Detroit automaker and founding member of the “Big Three” Ford Motor Co. learned this lesson in the 1990s and early 2000s when it aggressively expanded its holdings to include stakes in Jaguar, Aston Martin, Volvo, Land Rover and other ancillary business.
This buying spree spread the automaker’s research and development, engineering, marketing and management capabilities in a variety of directions and away from the company’s core focus.
As sales dropped and profit margins thinned, and the cost of legacy pension and healthcare programs mounted, Executive Chairman Bill Ford Jr., great grandson of founder Henry Ford, stepped in.
The younger Ford started “bulletproofing” the company through a series of divestitures and refocusing the company’s efforts back to its core – building well-engineered cars that consumers wanted to buy.
What is the lesson to be learned from Ford and other companies large and small that have leaped with both feet into the expansion game? Don’t be afraid to jump but make sure you don’t stray too far from the unique services and customer service focus that made you successful in the first place.
Expect The Unexpected
Rarely does everything go as planned in the business world. There are always mid-course corrections that need to be made and unexpected financial, employee and customer situations that cross an owner’s desk on a daily basis.
From the unexpected resignation of a top manager to the loss of a major client, small businesses are constantly challenged to stay sharp. Unless you have a very powerful crystal ball, owners can’t plan for every business eventuality. The unexpected will happen but there are steps owners can take to protect their organization.
Diversify Your Client Base
Dozens of small businesses have had to shut their door within weeks after losing their big, cash cow customer. Make a strategic move to spread your revenue across numerous clients, but also seek to spread your clients across multiple industries.
This way if one sector (i.e. residential customers) takes a hit, you don’t go down with the ship. Your commercial (i.e. shopping centers, office parks, manufacturing facilities), multi-tenant residential (i.e. apartment and condo complexes) and government (i.e. schools, hospitals) customers will be there to balance the boat.
Have Three Months Operating Expenses in the Bank
You never know when hard times might hit, and one way to dodge a bullet – or absorb one, if need be – is to have three months or more of operating expenses in the bank. Three months is usually enough time for a nimble small business to regroup and seek new revenue streams and other remedies if you’re required to alter course.
As often is the case, the success or failure of a business is directly related to the relationship it has with its customers. Knowing who they are, what services they need now and what services they will need in the future, is critical to building a solid foundation that will protect your snow and ice management company.
Owners and managers will also benefit from studying their competitors. What are their strengths and weaknesses? What direction are they going with new services or new markets? Having this knowledge offers small businesses another level of protection.
Being in the know with what is going your industry and local market is another important part of bulletproofing your company. Knowing the latest legal, regulatory and technology shifts taking place in the industry is a must for owners and their employees.
“If a small business stays on top of its customers, competitors and their business environment, its owner and managers can then carefully consider the appropriate direction the business should take to avoid risks and take advantage of opportunities,” says Glassay.
Don’t shoot yourself in the foot
A plan to bulletproof your company from downturns in the economy or from an unplanned emergency is only as good as the people executing it. Owners and managers need to be in tune with employees, customers, vendors and themselves in order to successfully protect the assets – both financial and human – for the long term.
Alex Glassay, managing partner of the Glassay Strategy, a Vancouver, BC based advisor to small business owners, says one of the most common mistakes owners and managers make when putting a bulletproofing strategy in place is not listening.
“Listen, especially to customers and staff who deal with customers on a daily basis,” says Glassay. “When owners and managers listen to customers and respond to their needs, they’ll reward you with their continued business.”
According to Glassay, another area where the bulletproofing process gets off track is when owners and managers over-complicate the process.
“Complicated plans that take a long time to complete usually end in failure far more often than short-term, simpler plans,” says Glassay. “Simple plans are easier to remember, easier to execute, and easier to correct if they go off track.”
Another mistake owners and managers make when it comes to developing a plan to protect the business is not attempting to develop a plan in the first place. Glassay points out that often, small business owners start their business because of a specific passion or skill.
However as the business expands, they find that being able to grow or even maintain the business, requires a deeper level of management skills they don’t have or necessarily feel they possess.
Glassay says many small business owners find this task daunting and will tend to ignore their own business’s needs. “They continue to work in their business and don’t find the time to work on their business,” he says.
Jeff Kear, A Colorado-based consultant to small business owners, says another common misstep is trying to do much at once.
He says pairing the plan’s elements down to manageable segments and staggering them over time will help you achieve a more solid, effective plan.
Kear also points to the fact owners treat all items as equal in the bulletproofing process when in fact some are more important than others. For example, business development should always be a top priority because of the critical role it plays.
“Without revenues, you don’t have much of a business to bulletproof,” says Kear. “Prioritize those activities that are more critical to accomplishing your overall business goals and focus on establishing those first.”
Jeff Fenner is a partner of Cleveland-based B Communications and a frequent Snow Magazine contributor.