Davinci Virtual

The goals you set for yourself and your business are critical for providing direction and focus to your long-term strategy.  All too often businesses will set what I like to call “fluffy” goals, thinking that they do not need to go into the details that large corporations do, because they think they understand their business. The problem with that way of thinking, is that small businesses need SMART goals MORE that large corporations, because the detail they provide helps drive accountabilty, and keep the company’s strategic plan on track.

SMART goals stand for:
Specific
Measurable
Attainable
Realistic
Timely

Here is an example of a goal written without using the SMART Goal Format would look like:

“I want in increase my sales next year.”

Now, here is the same goal written using the SMART format.

“In 2009, I want to sell four new accounts that will generate $200k in revenue each, to total $800k in total sales for the 12 month period.”

See the difference? Before I detailed this statement, I could have increased my sales by $100 and still reached my goal. Now I know that not only do I want to increase my sales, but I need to obtain 4 new accounts equal to $200k each, in order to hit my goal.

Give it a try, what are your SMART Goals for the upcoming year?

Customer Relationship Management (CRM) is a valuable tool that small businesses can use to maintain contact with their customers and build customer loyalty. Usually it is managed through a specific CRM software, and in order to be successful, employers must ensure that their employees are really motivated to learn the system and utilize the information.

One simple form of CRM is relationship building, a tool that allows business professionals to gain insight into their customer’s lives. The trick to this form of CRM is understanding that the data you collect on your customers is not directly associated with your business and services. Instead, you are attempting to gain personal information on your customers to help you manage your relationship with them. By learning who your customers are both in and out of the business environment, you develop a strong personal link to them, making them much more likely to engage your services, and much less likely to drop your business.

Try to obtain the following information from your customers over time:

• Family information – Is your customer married? When is their anniversary? Do they have children? Grandchildren? How old are they? When are their birthdays?

• Key Personal Information – When is their birthday? Where did they go to school? Do they have any pets? What kind of movies do they like? Do they have a favorite author? Do they travel often? Will they be taking any upcoming trips?

• Personal Preferences – Do they drink? If so, what drink do they prefer? Do they smoke cigars? What sports teams do they follow?

Once you have a good amount of information on your clients, you can begin to use it. For example, if you find out that one of your customers is a die-hard Duke University Alum, the next time the team plays and wins, send your client a little email about he game, or forward on a newspaper article highlighting the score. Taking time to do these little things shows your customers & clients that not only do you care about their business, but you also care about them. This is one simple form of Customer Relationship Management, but it can really pay off in the end.

One common business trap that small businesses can fall into is becoming comfortable relying on one or two major clients to support the majority of their business. The problem that arises in those situations is if one of the main players drops out of the game, you are suddenly thrust into a situation where you must scramble to catch back up from the loss. Because of this, it is extremely important for small businesses to diversify their client base.

It is acceptable for small businesses to run with one or two main clients, but the business must understand the impact that those accounts have on their business, and plan accordingly. For example, if you are a small business that has one major client that takes up a bulk of your business, make sure you leave room to bring in several smaller accounts that you could grow, if you have a need.

One way to understand each of your client’s individual impacts on your business is to create a spreadsheet where you break down exactly how much each client contributes to your business, potential growth opportunities, and a contingency plan, should the main money clients choose to leave. Businesses should review and revise this document every quarter, and every time a client or account either grows or shrinks. This is also a great tool for strategic planning for your accounts. By understanding that you have three or four small clients that have room to grow, you can allow your business to become more flexible to those clients, while still remembering your larger accounts.

Today’s small business leaders are always thinking ahead of their clients/customers. They are anticipating their next moves well before they occur, and they make business decisions off of these forecasted plans. By understanding how each client affects your business income, you too can develop client forecasts and pre-emptive strategies to keep your business (and your client’s business) running strong.