Wednesday

Why People Get Help

The 5 Fundamental Benefits

For any business to be successful, the people inside the business must understand why people would want their products or services. Understanding the 5 reasons people ask for help, and the 5 corresponding benefits they receive is critical to understanding what type of help you should offer.

I was brought up in a very small town where we learned to do most things for ourselves. My father seemed able to fix anything that broke, and build anything we needed. We tuned our own bicycles, replaced engines in our cars, we even built onto our house and added a garage. I learned that it was good to be able to do things for yourself. I feel very fortunate to have learned how to do so many things for myself from my dad.

What took me a little longer to figure out was when to ask for help. It was rare that my father needed to ask for help, so I began to see asking for help as a type of failure. I felt bad if I could not do something myself. Looking back now I realize there were many times my father asked for help (and many more my mother wishes he would have). When he did it was not a sign of failure, it was a sign of intelligence. He asked for help for some very good, basic reasons. The same reasons everyone asks for help if they are smart.

1. Don't know how to do something
Sometimes you plain don’t know how to do something. This applies to business just like it does to every day life. There are things that you don’t need to do every day, and you just never learn to do them. What’s the solution, get some help. Of course you could always go out and learn how to do it yourself, but usually its far better to just get some help from someone who already knows.

If you don’t know how to do something, your best bet is to find someone who has that knowledge and get it done right by an expert.

2. Don't have the time
I don’t know about you, but my list of things to do is always longer than my available time. To top it off, I don’t want to spend all of my available time working on to-do lists. Just because you know how to do something, doesn’t mean you have the time to do it.

If you don’t have the time to do something that needs to be done, you need to find someone who does have the time and free up your time for things that matter to you.

3. Don't have the tools
I spent a year work in residential construction, still one of the best jobs I ever had. I worked with two brothers who were great fun, and treated me well. We used a lot of tools on the job, but when it came time to put the roof on a building we always called a local crane owner-operator to come over and give us a hand for a few hours. He would hoist the roof trusses up, and we would nail them in place one by one. We asked for his help because he had a special tool that we did not, a crane, and he knew how to use it safely and efficiently.

Sometimes you can rent the tools. Sometimes it’s best if the tools come with someone who knows how to use them.

If you don’t have the tools to do a job, you need to find someone who has the right tools to get the job done.

4. Don't Want To Do It
Sometimes we come across things that we just don’t want to do. As a youth I changed the oil in my car myself. I don’t do it any more. I know how. It wouldn’t take me any longer than it does to go to the lube place and wait for them to do it. I have all the tools sitting in my garage. I just don’t like doing it anymore so I go to the lube shop and pay them to do it for me. I’m glad they’re there. They provide me with a valuable service.

There is always someone out there to help you with these things. They may like doing it, they may like you, or they may just want your business. In any case, helping people with things they don’t like doing is a great service.

If you have something you don’t want to do, you can always find someone who does. Let someone else worry about the things you don’t like doing.

5. More efficient to have someone else do it
Every person and business has certain things they do very well. This is generally because they have some combination of knowledge, time, tools, and desire that other people don’t have. Because they are so good at it they become very efficient and can often do things two times, ten times or even a hundred times faster than the average person. It is well worth paying someone twice what you think your own time is worth to get something done if they can do it ten times faster than you.

If someone else can do to faster and cheaper than you, it makes sense to let them do it. Having something done by someone efficient can save you tons of time and money.

Conclusion
There are 5 basic reasons people get help:
1. Don't know how to do it
2. Don't have the time
3. Don't have the tools
4. Don't want to do it
5. More efficient to have someone else do it

And consequently there are 5 basic service benefits that can be offered:
1. Get it done right by an expert
2. Free up your time for things that matter to you
3. The right tools to get the job done
4. Let us worry about that for you
5. Save your time and money

Providing a good service improves the quality of people’s lives. The better you understand people’s reasons for wanting help, the better equipped you are to help them. Remember every successful business helps themselves by helping others.

Tuesday

Why People Buy Things

The 6 Fundamental Reasons

For any business to be successful, the people inside the business must understand why people would want their products or services.

I travelled to Brisbane Australia several years ago, arriving at midnight on a bus from Sydney. I was alone, had no place to stay, and very little money. I needed a place to live out the next 6 to 8 hours. I was looking to meet my basic needs. With no real knowledge of the city, I started looking for a bridge to sleep under. As it turned out I met a cab driver walking down the road who took me to a nearby hostel where I got to sleep on the couch for the night. If he had tried to sell me a trip to the Grand Hyatt, I would have had to decline. I was not looking for comfort; I was looking for basic shelter. He had backpacked in his youth, and understood where I was coming from. He correctly assessed my situation, and offered me a solution that worked for me. The cab driver understood not only what I was looking for, but why I was looking for it. I needed shelter, but I only wanted to meet my basic needs, nothing more. If I ever met him again, I would thank him and buy two of whatever he was selling.

We can break the reasons why people buy things down into 6 categories: basic needs, convenience (saves time or effort), peace of mind, image or ego, fun, and increasing personal wealth. Understanding which category (or categories) a problem falls into is critical to providing an appropriate solution.

Why people buy things:
1. basic needs
2.convenience
3. peace of mind
4. image or ego
5. entertainment
6.increase wealth


1. Basic Needs
Basic needs are easy to understand. These are the things we need to survive. On a personal level this includes food, shelter and the like. On a business level these are basic elements required to do business like materials & labour. If you are addressing a basic need you can expect price to be a major factor. People don’t want to pay extra for their basic needs; they want to save that for more interesting things. When I slept on the couch in the hostel in Brisbane, I felt fortunate to have done business with that cab driver. The cab driver had met my needs exactly.

2. Convenience: Saving Time and Effort
We all like saving time and money. Anything convenience that saves us time and effort is a big plus. At a personal level, we often make purchasing decisions for convenience. Why do people buy dishwashers? Could we really not do the dishes by hand? Sure we could, but we don’t want to be bothered. If we’re looking for a place to live, we’d like a dishwasher or a housekeeper. It’s not a basic need. It’s a time and effort saving convenience. Paying for convenience is common. We want to spend our time and effort doing things we like.

In a business setting, time and effort savings are money in the bank. I don’t know about you, but I sure don’t want to be paying someone $20 an hour to cut lumber by hand if I could pay them $20 an hour to cut it with a chainsaw. If I need much lumber at all, a chainsaw purchase makes good business sense.

3. Peace of Mind
Peace of mind is something we all want. This is about buying security. The motivation is very similar for personal and business situations. We want to know we are safe, so we buy smoke detectors and fire extinguishers, maybe even a sprinkler system. We want to know our families, our employees, and our homes and businesses will be okay if something unexpected happens, so we buy insurance. Everyone has some level of fear of the unknown and the uncontrollable. Peace of mind is a powerful motivator.

4. Appeals to Image or Ego
Never underestimate the power of the ego. People are vain. We all love to look good in other people’s eyes. We like it when people are a little bit jealous when they look at our lives. We certainly don’t want to be looked down on or felt sorry for. We do and buy many things either because we like them (our own self-image), or because we think others will like them. Image and ego based decisions are emotion based decisions. Logic has no place here, it’s all about how something makes us feel. Tell your parents or friends that you’ve just bought a house in the right neighbourhood, and you are sure to get that hearty “Wow, good for you”.

So Image and Ego definitely motivate personal buying decisions, but do they also impact business decisions? Absolutely! At every level, business is personal. The owner of a business wants his business to appear to be the best. The manager of a department wants his department to be the envy of the other managers. The salesman wants to be recognized as the top seller. The Engineer wants to be seen as the most innovative designer. Ego and image are still driving decisions. Remember that a business is just a collection of people. Personal relationships and feelings are still what get things done. Business people still buy with their emotions. The only difference is that they then (sometimes) apply logic to justify the decision. If two solutions are similar you can be sure the one that satisfies the ego best will be the winner.

5. Fun
You need look no farther than the multi-billion dollar entertainment industry to know that this is true. We love our leisure time, and we’re willing to spend, spend, spend to have fun. That big screen TV, or the pool table in the basement have no practical purpose, they’re just fun. Businesses are no exception. Millions are spent by businesses every year on employee events, sports tickets, and workplace ambience. This is where we like to spend our money. It’s Fun.

6. Saves or Increases Money
Financial freedom is a burning desire inside many of us. It is our road to ensuring all the other objectives: basic needs, convenience, peace of mind, satisfying our ego, and having fun. So it’s no surprise that people will invest their money in things that either save them money, or make them money. We all want to be free. For individuals financial freedom means securing your retirement, increasing your leisure options, leaving something for your kids, and the ability to help others. For businesses, this is what it’s all about. Business success equals personal success for everyone involved in a business from the owners to the employees. Helping everyone save or increase their money is the name of the game.

Understanding the reasons people buy, is just as important as understanding what they buy. Just knowing I’m looking for a place to live is not enough information to solve my problem. Do I want basic shelter for the night (basic need)? Do I want to be closer to work (convenience)? Do I want to feel safe letting my kids play outside (Peace of Mind)? Do I want a home I’m proud to entertain in (Image or Ego)? Do I want a pool table and a big screen TV (Fun)? Do I want to be able to sell it and finance a move to an acreage when I retire (increase money)? Understanding the reasons why I want a new place to live are critical to solving my problem. This applies to all purchasing decisions.

The better you understand people’s reasons for wanting something, the better equipped you are to help them with a great solution.

In the end providing the right solution improves the quality of people’s lives. The better you understand people’s reasons for wanting something, the better equipped you are to help them with a great solution. Remember every successful business helps themselves by helping others.

Friday

Why Are Businesses In Business?

A Short Rant on Business 101

Looking back I can’t believe how long it took me to truly understand what a business was for. I’d heard it repeated countless times, albeit for the most part by parrots and non-believers. I’d seen it portrayed in posters and articles all around me, but somehow I remained blind to the message. Like many of us, I was brought up believing that to make it in business you had to be ruthless and unfeeling at times. Clouded by this false perception I refused to believe the mantra all around me: “The Customer is Number One.”

The Purpose of Business

What follows is, admittedly, a bit of a rant. It’s important that you read it. Here’s why. To understand what businesses do, you need to understand why they do it. To understand how to improve the business you are in, you need to understand its true purpose. That’s what this is all about.

When it comes to business, you can look at things in one of two lights: Good or Evil. The evil view is that the heads of major corporations exist for the purpose of taking our money from us. If you’re looking for a bad guy, few compare to the faceless evil of corporate America so often portrayed in today’s media.


The Evil Corporation: Out to get your money!

The Good Company: helping us fulfill our needs and desires.


If you bother to take a second look with the good light turned on, you will have to admit that successful businesses are there helping us fulfill our needs and desires at every turn in ways we could never achieve without them. Are they in it for themselves? Absolutely! Are they also in it for you? Absolutely again!


Are they in it for themselves? Absolutely!

Are they in it for you? Absolutely!


Fundamentally successful businesses are started for two reasons.

1. To help themselves
2. To help others

Yes, they can do both. In fact they need to do both to remain useful to themselves and to remain useful to others.

Think about your favourite store, maybe it’s a stereo shop, a clothing store, or even a grocery store. What happens if they raise their prices so high, or hire such rude sales people that you and your friends stop going there? They start losing money and go out of business. You probably wouldn’t care, but they would no longer be able to help themselves, at least not with that business.

Now what happens if that same business hires lots and lots of really nice people to spend extra time with you, and then lower their prices so you get everything at near cost? They start losing money and go out of business. This only difference is this time you care, because now you can’t go back to that friendly store. Now you can’t return that item you didn’t want, or get it fixed under warranty. Because they didn’t help themselves enough, they can’t help you any more either.

So what’s the solution? Simple, they help themselves by helping you. They want to do both. They need to do both. You also want them to do both.

What do businesses do? They help others achieve their needs and wants, and they also help themselves in the process. The one who figures out how to help others the most is the winner. There is no other reason for people to patronize a business, other than to get something they either need or want. If a business doesn’t help you get that as much as their competitor up the street does then they go out of business. If a business helps you so much they can’t make a profit, they also go out of business and are not much help to you in the long run.

Every successful business helps themselves by helping others.
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Wednesday

Welcome to Business 101

A Quick Overview

All too often people make the transition from task based or technical job functions to management without really understanding what their business does. That was certainly my story. So I learned as I went along. I went to seminars, questioned my peers and managers, listened to audio courses, read a lot of books, and banged my head against my desk for long hours trying to make sense of it all. The “how” was easy. The “why” is what drove me crazy because so few people seemed able to explain it. I truly wanted to leave things better than I found them, and to improve the “how”, you must understand the “why”.

This writing is the compilation of years of personal study and experience. Its intention is to help you understand business as a whole, and provide some answers to these questions:

1. What is our business for?
2. What does our business do?
3. How should our business be organized?
4. What is the objective of each part of our business?

I believe everyone needs grounding in business 101 if they hope to help shape their business, and provide the very best for our friends the customers. I hope you enjoy what I have to say, and learn a lot along the way.

Upcoming Topics

The Basics of Business - Grasping the Concepts

  • Why Businesses are in Business - People helping People
  • Why People Buy Things
  • Why People Get Help
  • How People Find Solutions
  • How Business is Organized to Help Provide Solutions
  • The Two Ways to Grow a Business: More Money In or Less Money Out
  • Top 3 Ways to Shrink a Business
  • Basic Measurements - How do we know if we are succeeding?

    Basic Business Cycles: Day to Day Operation

  • Daily Business Cycle: Sales, Orders, Fulfillment, Support
  • The Sales Cycle
  • The Operations Cycle
  • The Roll of the Orders Team
  • The Roll of Customer Service

  • Growing the Business: Increasing Sales

  • Increase the number of customers
  • Increase the average value of each sale
  • Increase the frequency of sales

  • Growing the Business: Lowering Costs

  • Understanding Variable Costs
  • Understanding Fixed Costs
  • Reducing Costs

  • Introducing New Solutions

  • Finding New Ideas
  • Creating New Solutions
  • Commercializing New Solutions

  • Are We Succeeding? Finance 101

  • The Balance Sheet
  • The Profit & Loss Statement
  • Cash Flow Projections
  • Sales Forecasts
  • Success Rate Metrics
  • Cost of Failure Metrics
  • Budgeting

  • A Deeper Look at Each Department

    Core Competencies
  • Sales
  • Orders
  • Fulfillment (factory)
  • Customer Service
  • R&D
  • Marketing

  • Cross-Functional Business Segments
  • Strategic Planning
  • Quality Assurance
  • Human Resources
  • Finance
  •