Business Intelligence for Small Business

Business Intelligence has become one of those terms that reaks of consulting-ease, but in it’s truest form, business intelligence (BI) is as genuinely necessary for growing a businesses of any size as anything other than cash flow can be.

Business Intelligence is the process by which we gather meaningful, raw information about our business and make sense of it through well thought out analysis and defined analytics. More simply put, BI is the process of putting the puzzle pieces together so you can see the real picture. For example, it’s great to know how many visitors you have to your web site but it’s also essentially useless unless you also know things like:

• where they came from (google, direct, a link on someones site, …)
• what keywords drove them to your site
• when they came
• what they did when they were there
• what place in the purchase process they are dropping off
• etc…

Once we define the analytics that are important to us and gather a meaningful amount of raw data we can begin to draw a picture of our visitors/customers and their behaviors that will help us make decisions about how to better target our efforts to them, make our site easier to use, buy things from and generally provide a positive user experience.

The intent is of course to drive more traffic and more sales as measured in visits and conversions respectively. The difference between where you are now and where you will be when you start mining and making sense of your data can be enormous. But even if the difference is smaller than you would like, it is still likely to be enough to give you an edge over your competitors who don’t leverage BI.

Effective use of Business Intelligence is also an important tool for small businesses who want to grow beyond small and into medium and eventually large status. Besides the raw analytics and data you will collect over time, the process of BI may also help you stay focused on what is working for you and helping you grow, an important consideration since so many businesses start to loose their way or try to be all things to all people as they grow which is typically a huge mistake.

Consider very carefully the intelligence you can derive from your business and if you’re not sure where to start, contact me if you would like help getting started. We’ll look at your business wholistically to make sure we consider as many relevant areas as possible. Your website is a great place to start but there is a lot of info that can also be derived from your daily operations and interactions as well.

Watch the data and get smarter!

Conversion to WordPress

As you can see, over the Memorial Day weekend, I finally managed to get my website converted to WordPress. Other than the content (all the old stuff is still here) everything has changed and I welcome your feedback.

Despite the fact that it took a while the process was really relatively easy, thanks largely to careful planning. If you have ever pondered the transition to WordPress for your own blog or website I highly recommend it. The platform is incredibly extensible and customizable. The available support is phenominal, even the documentation on the website is surprisingly good. Anyone who knows developers knows how much they despise documentation.
I also had the privilage of working on a couple of other client sites over the weekend via my company BlackBox Technologies. Wendistry was the first conversion and came out beautifully. My personal blog, scottismy.name also got converted (actually migrated, it had been on WP for a while) and two other client sites which have not gone live so I can’t disclose their names but be looking for reviews in the near futue (I’ll be sure to plug BlackBox again so you’ll know who they are).

It was a long and tough weekend of heads down coding and implementing but sometimes it feels good to get your hands that dirty, and all of the planning and preparation are done so that when the time comes, as it did this weekend, we can simply execute our plan.

Hattip to: Jon at 3nhanced for how to create the cool WP logo.
Enjoy the new site and let me know what you think.

Frameworks, Methodologies and Processes

As I was writing the posts on the Idea Lifecycle Matrix I got caught in a couple of conversations about frameworks vs methodologies vs processes reminding me that there is some confusion about the differences between all three and how they fit together.

I’ll start by telling you that despite the way these terms probably sound to you and the way they are often abused they are not “fluffy” consulting words used to describe useless constructs whose only purpose it to help guys in suits look smart and charge high fees. The application and understanding of frameworks, methodologies and processes can transform businesses, they are why some companies, despite what you may think of them, have grown to immense size and value, unimaginably so to most of us. So I would encourage you to put aside any preconceived notions you have about these topics and we’ll see if we can clarify some of the confusion.

Frameworks:
Frameworks are by definition a little loose. They exist to provide structure and direction on a preferred way to do something without being too detailed. In essence, frameworks provide guidelines. They are powerful because they provide guidance while being flexible enough to adopt to changing conditions or to be customized for your company while utilizing vetted approaches.

The Idea Lifecycle Matrix is an example of a framework. More well known is the Capability Maturity Model or CMM.

Methodologies:
A methodology is an approach to “doing something” with a defined set of rules, methods, tests activities, deliverables, and processes which typically serves to solve a specific problem. An example of a business methodology would be how, in a defined, planned manner, you test something, validate results, establish the deliverables and determine how to improve and monitor that “thing” on an ongoing basis. Methodologies demonstrate a well thought out, defined, repeatable approach. Using well worn methodologies provides a lot of support to the validity of the way you do something and the results you get which is important to your clients.

The scientific method is an example of a methodology (now just apply that thinking to business).

Processes:
Processes are probably the easiest to understand since we all work with them daily, even when we don’t know it. A process is simply a well defined set of steps and decisions points for executing a specific task. Well planned and deeply understood processes are essential to your ability to automate business tasks. This is really where that magic happens, a the process level. Generally speaking, processes are highly repeatable and if it can be repeated it can be automated (with exceptions or occasional human intervention of course).

An example of a process would be how you process payments to vendors you work with and the steps and decisions involved in doing so. When working through processes and defining them be EXTREMELY detailed, otherwise attempts to automate will end in futility. Capture every action and decision and outline sub-processes as necessary.

Hopefully that clears up the differences between frameworks, methodologies and processes. While they appear somewhat hierarchical, and can be, they aren’t always necessarily so, particularly in both directions. Frameworks will typically have methodologies but not always. Methodologies will typically have [multiple] processes embedded, but some processes will be stand alone.

The real power of combining these things is in developing processes in the context of a methodology and applying methodologies in the context of a framework and most importantly, when you utilize all of those things in the context of YOUR business. The exact same approach won’t work for every business but every business, no matter how large or small, can benefit from applying these principles.

Alternatives to Help Lower the Cost Of Starting Up

Like many entrepreneurs, I have in the past made the mistake of racking up expenses before I was actually executing my business because I thought I needed those things in order to make my business work. It takes money to make money right? Well, that old saying is really only true in it’s literal interpretation. It will cost you money to incorporate, host your website, … but there are many areas where spending has become less necessary than in the past.

Communications:
Mobile phone plans are cheaper than ever and many include long distance, data and other services. Some will even give you access to wifi hotspots. I personally have not had a home phone since 1998, long before most people gave them up for only having cell phones. After the first six months of that year I realized I never used it and was spending $50-60 a month for nothing. Ditch it if you can, but if you really need a separate line, go with a VoIP service provider like Vonage.

Cable, Fiber or DSL? Whatever you chose, you’ll need net access. If you can get fiber great but unless you are in a bandwidth intensive biz, you probably don’t need it right now. Cable is better than DSL in my opinion but if you opt for DSL, don’t let the phone company convince you that you have to have an active landline for it to work, you don’t (I used to work in Telecom and know better and now you do too). You need wires there yes, but not landline service.

Technology:
Microsoft Office is a great suite of tools but it’s not necessary. Open Office or just using Google Docs can be a great alternative and both are free. I haven’t used Open Office in a while but the only down side to using Google Docs will become obvious if you do really heavy spreadsheets with lots of drop-down lists, pivot tables and other dynamic functionality. If you don’t, and that is 99% of you, then Google or Open Office are a great way to save hundreds of dollars and not worry about loosing data if your computer crashes.

Need an extra computer, consider installing Ubuntu in stead of Windows. it’s the most user friendly Linux version ever and if the majority of use for that computer happens through a web browser, all the better, it’s fast, secure and free.

Here are a few other ideas for you:
1) Buy new technology or other assets when you need them, not in advance because you expect you’ll need them later.

2) Be prepared to trade services with people when you can but expect that some will still simply want to be paid for their work and eventually you’ll want the trade thing to all but go away. still, in the early stages it can save money and you might build a great partnership.

3) Shop around, for everything.

4) Don’t go cheap on things you really need or that are core to you doing business. Spend where you need to, not where you don’t.

Starting a business is fun but expenses can run away if you aren’t careful and that first big bill will show up before the first revenue and strip the fun out if it very quickly. Starting a business isn’t an excuse to go on a shopping spree just because you can write some or all of it off.

Perception = Recession = Opportunity

Perry Marshall wrote an interesting rant about the perception of a recession as opposed to the reality of one. I tend to agree with him though as he acknowledges, that perception can become a self fulfilling prophecy.

So what does that mean for us? Opportunity!

While everyone else is either pulling back or is too busy looking up to see if the sky really is falling, we can deepen our roots, expand what we are doing or start new en devours. While borrowing, due to the housing issues (which is reality), may be a little maybe a little more difficult, borrowing from an institution isn’t the only way to get things up an running. More importantly, the other vendors, consultants and people we will need to do business with may be offering their goods and services at a discount or will at least be easier to negotiate with because 1) they also believe there is a recession right now or 2) everyone else does and isn’t spending as much money with them. Either way, it’s good for us and those complimentary businesses really want our business.

I look at all the recession hype as “clearing the path” for us making it easier to do what we want to do, especially if we are efficient, have good processes and run a tight ship. This is a classic distressed business opportunity market.

It doesn’t mean a recession can’t happen but don’t get caught being a “dooms-dayer,” it’s wasted energy. Just because market growth has slowed doesn’t mean we are in a recession and don’t count on the government to bail us out if a recession does pop up. In fact, hope they don’t. Government interference usually results in longer term problems than a real fix.

No matter how you slice it, when everyone else is panicking and things look bad, there has always been opportunity. If you dive in or expand what you are doing, just manage your risk a little tighter and remember that there are plenty of goods and services that people need and want, no matter what the economy is doing.

Prevention vs. Cure

In college I earned a Bachelors in Psychology. On the surface, it is the most ubiquitously useless degree you can earn. In reality, I learned things about human behavior that I have been able to apply since the day I learned them, to nearly ever facet of my life, including business. I make this point because no matter how good your idea, business plan, technical skills or charisma, the one thing you can never overlook or completely quantify is human behavior. For all of our intelligence we are also emotional and often irrational.

You can however infer patterns and learn how to think about human behavior so that you can direct it, or direct your business toward its tendencies so that you end up with the desired result.

What brought me to this seemingly off topic discussion was an e-mail I received from Perry Marshall today (whom by the way, if you don’t keep up with you should). Perry made the following point and it is an extremely important lesson to remember: People don’t buy prevention, they buy a cure for their existing problem.

In his own words regarding prevention: “if you want to sell it, it’s much easier to sell it as
part of a cure than trying to convince someone who’s never had the problem in the first place.” Let’s face it, if we have never been faced with the problem, we just don’t think about it.

Trying to convince someone to take action to prevent something from happening typically leads to counter-productive activities such as beating your head against a desk. Companies don’t think about e-Discovery until they get sued, most people start to workout once they feel the need to loose weight, not to keep it off in the first place (let’s be honest here), that is simply the overwhelming trend.

Of course there are exceptions, but most of them are easily contradicted by other behavior. We take vitamins to help us stay health but may still eat more than is so. Where does the exception become the rule? When the probability of an event and the cost of not preventing it from happening greatly exceed (think in terms of catastrophic loss/exponential amounts here) the cost of preventing it or managing the risk in a proactive manner (this is why we buy insurance); So tailor your product accordingly.

The point is, people are infinitely more likely to take action (i.e. buy) to solve a problem they have now, not to keep one from happening in the first place. So apply your ideas to solving existing problems and somewhere in there bundle your value added product or service to keep the problem from coming back or to drive operational efficiency. You’ll sell far more and your customers will love you.

A Consultant’s Greatest Weapon

If you are a consultant or aspire to be one, one of the greatest assets you can bring to bear for your clients is the ability to deliver fresh, good ideas that are relevant to their business. Your ideas may not be entirely new to you, but they often will be to your customer. Original thinking and the ability to create a blueprint of your idea followed by a roadmap from which to execute are, in my opinion, more powerful than the technical skills needed when first starting out. I don’t want you to think you can easily make a business out of being just an “idea” person; you can be “the idea guy” but you must remain grounded in your ability to execute. Regardless, good, relevant ideas can be the springboard to entirely new and immensely powerful revenue streams, efficiencies and satisfaction client for your client.

From the current reading “Guerrilla Marketing for Consultants: Breakthrough Tactics for Winning Profitable Clients”

“Clients and prospects have zero tolerance for marketing fluff, but a deep thirst for ideas that can help them. Selling services is not just about price, qualifications, or your firm’s long string of success stories (as thrilling as those are). It’s about the insights and ideas you bring to clients… if you can’t provide great ideas, you might as well stay home.“

Busy or Productive

We all have those days where we busy to the point of exhaustion (today was one for me hence this blog entry). But how often do you stop and ask yourself if you are being productive or just busy? In 4 Hour Work Week Tim Ferris intelligently suggest that asking this single question several times a day can work wonders in keeping you on track if, when you find you are simply busy but not productive, you stop what you are doing and get back to doing whatever it is that will move you toward your goals. It’s entirely too easy to get distracted doing things that seem important; but if they aren’t positively impacting our success they are likely more of a distraction than necessity (as always there are exceptions). It’s important to ask the “Busy vs. Productive” question of everything you do. I’m less concerned about the 10 minute game of solitaire at lunch than the one hour conference call you have to endure, accomplishing nothing. If you can, find a creative way to get out of it and get back to doing something productive. In a business context ask yourself whether your current activity is helping you make money or get closer to doing so, if not, it’s probably time to shift gears. Of course making money isn’t the only goal, or even the ultimate goal of many businesses though it is an essential one. But we’ll talk more about that tomorrow.

Write It Down

It never fails to amaze me how many entrepreneurs fail to put things in writing and I’m not just talking about contracts. The act of writing down your ideas, documenting processes, writing a business plan, template sales letters and everything else forces us to view things differently than if we just “think” about them. The process engages different cognitive skills and parts of the brain which will in turn bring about new perspectives, ideas and realizations about what we are doing which we may not come to as easily, if at all, when we don’t write things down.

A few benefits of writing things down include:

1) Business continuity: Even if you are the business, it makes it easier to recall things, especially after an extended happy hour the night before.
2) Gaps in the business or process will be much more evident allowing you to fill them in. The single biggest “mystery” why your business is struggling may be right in front of you and documenting things may help you see it.
3) It gives you a chance to view your business from the top down from big picture to tactical details so it can become repeatable. How else will you improve your business and make it truly turn-key?
4) It shows investors and potential partners that you are serious about what you do.
5) You will develop new ideas in the process.

A few thing to make it easier:

1) Most of us hate watching someone thumb-tap away on their Blackberry at happy hour, but as an entrepreneur we have to be light on our feet and you never know when ideas will come to you so be prepared to tap them out in an email to yourself so you’ll remember later.
2) Use diagrams. The ubiquitous PowerPoint can be annoying and overused but there is an art to taking your complex ideas and processes and distilling them down so they can be easily understood by anyone (including you). It takes time but is worth it and by doing so you will often be developing your own intellectual property (IP) which can add a tremendous amount of value to your business.
3) Do it but don’t over-do it.
4) Leverage from others and learn from what they have done. Sometimes what you need is a variation on what someone else has done so look before you leap. You might just improve an existing process and give yourself a competitive edge with less effort to you.

There are a many other benefits and techniques but the point is to get the ball rolling. The biggest reasons we don’t do better with documentation is because we are lazy, it isn’t glamorous and it takes time. But if you are truly serious about your business you’ll find the balance between documenting as needed without letting it consume you and becoming a distraction from running your business. Writing things up is an essential part of moving from working “in” your business to “on” your business.

Tools of the trade: I have taken to documenting everything I reasonably can in MindJet Mindmanager. It makes the brainstorming, organization and distribution of notes, documents and almost everything else not only easy but (believe it or not) kinda fun. Not inexpensive but it will save you loads of time and really help you capture a lot of information in an easy, intuitive manner.

Using Market Forces to Your Advantage

In conjunction with a long time friend, business partner and physician, Dr. Brad Bichey, M.D., we recently released a whitepaper entitled “Using Market Forces to Drive a Competitive Edge.” While the paper is targeted at medical and life sciences companies, the principals can be applied to almost any business. When markets turn down belt tightening begins; it is in that down turn that we have the best opportunity to explore creative ways to market our companies. For small business, creative marketing techniques are often a necessity. We just don’t have the dollars the big guys do but in many ways, not having a lot of money to work with can be a blessing because it forces us to think of new and more efficient ways of accomplishing what we have set out to do. In the paper Brad and I briefly introduce the concept of using market forces that already exist to your advantage by restructuring relationships and leveraging the higher volume and higher ROI channels that are often overlooked. If you are interested in more read the paper and let me hear your thoughts on how you might apply the concept to your own business. If you would like to hear more about our ideas on applying this to your business feel free to reach out.

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