Strategy

The one pound lunch

I was sent a link to an article about a pub in the UK that has decided to only charge £1 for their meals. All the meals. Lunch and dinner.

And their gamble is paying off.

“Three or four months ago we were really struggling, we thought we would have to give it up,” he told Sky News Online.

“Back then we typically had 15 people in for lunch - today I’ve had 300. Tonight there’ll be about 350 people in, whereas four months ago it was 20.

In fact, the gamble has paid off so well for them, they aren’t going to go back to regular prices. How do they make a profit by pricing everything on the menu at only one pound?

“We are making a profit by doing everything ourselves, shopping and sourcing the food locally, we’ve got a local butcher who works along with us,” says the landlord.
“We can do some of the items on the menu - things like meatballs and chips or chicken and chips - for 20p or 30p a portion, so we’re still making a profit.”
The pub is now doing a roaring trade with people travelling from Birmingham and even Liverpool to enjoy the food.

Now, there’s a business that moves with the punches. Good for them.

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

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Are You in Cost-Cutting Mode?

Interesting article today on Businessweek.com about the importance of recognizing your business costs and getting them under control now verses later, when it could be too late:

“…by recognizing the problem early and making moderate reductions, small firms can avoid more severe cuts later on, financial experts say. Companies that ignore warning signs can erode their profits with rising costs, and those that borrow to meet those costs can wind up insolvent.”

How many of you are looking at your personal or household budgets and cutting expenses? Change vacations plans? Did you dump those magazine subscriptions that you don’t need?

Why wouldn’t you do the same thing at your business?

The answer is, you would! No question. Right?

Now, here’s the next question. Are you being smart in your cuts, or are you looking at the highest costs and slashing them without really looking down the road and seeing what the cut is going to do to you later on? How many of you immediately shut down your advertising campaign? Canceled all your trade show appearances? Eliminated a position or two on your staff?

Let me say this again. Cutting your business costs now verses later is a good idea… but making sure you make the right cuts is going to make the difference between having a strong and functioning business and a “just hanging on” business down the road.

You are in business now because you made smart choices. Keep that up. Pull open your budgets, study your cash flow, your planned vs actuals, your forecasts. Adjust them for the good, the bad and the really really ugly. Be brutal in your projections and then look at your costs.

Make a plan. A good plan.

Now is not the time for guess work and hasty decisions. You can’t afford it.

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

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SWOT is not Special Weapons And Tactics

Ok, so, if I am not referring to a special police unit what is SWOT and how can it help you run your business better? SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Every business should be doing a SWOT assessment every year to make sure that they understand the current market and to focus on the opportunities for the coming year and identify any particular threats which may be on the horizon. Threats and Opportunities are driven by the market and industry your business is in, whereas Strengths and Weaknesses are driven by your particular internal organization.

Recently we had a business owner ask us a question about SWOT:

How would/could I use the SWOT analysis tool to assist in my purchase negotiations. How does knowing your strengths and weaknesses, etc., help?

This is a great question as it sheds light on why all businesses need to know their SWOT and should review it annually. If you are suddenly in a position to sell your business for instance, as in the case above, knowing your SWOT can help you in negotiations in the following ways:

  1. You can clearly outline the revenue opportunities for your business, by understanding the Opportunity portion of SWOT. Because the Opportunities are market driven they are simply there for the taking — if the business can recognize them, and put resources in the appropriate place. This is a great selling point for a business because opportunities should exist no matter who owns the business.
  2. By understanding the Threats, you can mitigate certain questions/fears that a potential buyer might have. You can address certain threats and clearly lay out a plan to combat them. You come out looking like a smarter business owner, and give the impression that you are running a tight ship - something all potential buyers want to know.
  3. By knowing your Strengths, you can emphasize them in your negotiations. Perhaps a strength is your history in the industry or the loyalty of your customers. Maybe a strength is the fact that your product and/or service has been the clear winner in the market. You want to clearly outline your strengths as they should help you get more $$ for your business if are trying to sell it.
  4. Your Weaknesses will probably be downplayed during the process of selling your business. But knowing your weaknesses prepares you to address concerns the future buyer may have.

So now you know specifically why SWOT can help you if you are selling you business, but how can it help you run and grow your business? Think about this example:

John is a real estate agent trying to sell a house. In order to price the house, and figure out the right way to market the house, he starts listing the different pros and cons:

  1. The house is in a great neighborhood. (Opportunity)
  2. The house has no garage. (Weakness)
  3. The house has an internal vacuum system. (Strength)
  4. The house may be in an area with weak planning restrictions. This means the house across the street could get torn down and an apartment building could be put in its place. (Threat)
  5. The house has a brand new kitchen. (Strength)
  6. The house has a shady backyard. (Weakness in Oregon, Strength in Arizona)

You can see the mental process that John has gone through in order to market and sell this particular house. This is the same thing you want to do for your business. In order to understand the pros and cons, and position your products and services in the current marketplace you NEED to understand what market conditions you are up against (threats), or make your solution perfect for the customer (opportunities) and what your company brings to the table (strengths) and what your company is not very good at (weaknesses). By identifying your SWOT you can then build a strategy to either take advantage of (strengths and opportunities) or combat (threats and weaknesses). Your SWOT is usually the first step towards creating a strategic plan to market and sell your products and or services. And when business gets a little tougher, maybe due to a bad economy, knowing your SWOT will help you put your energy in the right place, while being aware of which factors may threaten or weaken your business.

Have more questions about SWOT? Read more here.

Sabrina Parsons aka MommyCEO 

Email Center Pro

The fundamentals of networking

You may start noticing a theme on the BIG Blog - “Back to Fundamentals” - and when you sit down and think about it, it is a really simple idea that can have a really big impact on your business. Whether or not your company is in a financial pinch, the economy is in a slump or things are booming, it never hurts to evaluate things and get back to the fundamentals of business.

Marketing is a key component to the success of any business, so I want to focus my future posts on getting back to the fundamentals of marketing. Often times people think effective marketing campaigns require a big budget, when in reality there are many ways to market with little to no budget. Networking is one of those ways.

The word “networking” can evoke a mix of emotions from people. The old, standard definition of networking (a meet and greet evShaking Handsent where you shake hands and make small talk with others) isn’t the only way to truly and effectively network. That being said, there is generally going to be some handshaking and small talk to learn about someone’s business and tell them about yours. There are a number of ways to effectively meet people, learn about their businesses and determine how you can create a mutually beneficial relationship, all with little to no cost and without cheesy and uncomfortable small talk. Here are some simple ideas of where/how you can network:

  1. Professional associations related to your industry
  2. Local or regional associations or groups
  3. Traditional networking groups/clubs
  4. Cultural associations
  5. Chambers of Commerce
  6. Local business events (business after-hours, business expos, etc)
  7. Join a gym
  8. Volunteer

In general, use every opportunity (business or personal) as a potential networking opportunity. Networking doesn’t have to be cheesy or boring. It can be as simple as striking up a conversation with someone who you meet in your morning workout class.

Kristen Langham
Manager of Business Development
Palo Alto Software

Strategy is Focus, Still.

Strategy is focus, and focus is strategy. The secret to failure is trying to please everybody.

I just saw a nice example again this morning, as Seth Godin explains why he’s doing just a few things, and not a lot of different things. He calls it the sad truth about marketing shortcuts.

If you have a presence on Twitter, Squidoo, blogs, Facebook, MySpace, LinkedIn and 20 other sites, the chances of finding critical mass at any of them is close to zero. But if you dominate, if you’re the go-to person, the king of your hill, magical things happen. One follower in each of twenty places is worthless. Twenty connected followers in one place is a tribe. It’s the foundation for building something that matters.

This is why I don’t have a podcast, a video channel, any activity to speak of on Facebook. It’s why I don’t use Twitter or travel the country visiting bookstores. There are many places to be, and it’s tempting to act like those non-profits and race after the next one. But it doesn’t work.

Good point.

Tim Berry
President and Founder
Palo Alto Software

Planning in times of uncertainty

Regardless of whether you are based in San Francisco, California or London, England, we all agree that recent months have been pretty unstable from an economic perspective. What should one do with all of the business uncertainty we now face? As these two articles by Alan Gleeson of Palo Alto Software Ltd, U.K. describe, it is not a time to “batten down the hatches”. Instead Alan describes a number of solutions to help you manage your business through these times of unprecedented business uncertainty.

In Planning in times of Extreme Turbulence he suggests that managers revisit their business plans, undertake some scenario planning and also that they look for new opportunities as competitors scale back!

In his article, Steps to Recession-Proof your business plan he describes how it is important to assess your own businesses vulnerabilities as well as ensuring that all aspects of your credit control system are functioning effectively.

As he concludes:

“The increased uncertainty in our environment means that planning for the future has become more difficult. However, it is how we deal with this extra risk that will determine how our businesses fare over the coming months and years.”

Tim Berry
Founder and President
Palo Alto Software

The Psychology of Email

The science behind email behavior is extensive, I’m sure, and not something that I purport to know much about, from a factual standpoint. Most of the email-based thoughts and assumptions I make throughout my day are driven by a fair bit of intuitiveness — with a dash and a half of instinct and a peppering of intelligence gathering.

I would hazard a guess that most people fall into my category — that is, if they think at all about email as anything more thhan simply a communication medium.

But not Kaitlin “Ducky” Sherwood. You can click on her name to read her full bio, but I’ll give you enough information to establish context. She’s written two books on overcoming email overload, was the first Webmaster at the University of Illinois (during the Mosaic creation days) and just recently earned an MS in Computer Science.

I got to spend an hour on the phone with her, aggressively asking for her opinion on email and cautiously tip-toeing into her thoughts on Email Center Pro.

Sherwood speaks with confident conviction about all manner of topics, but, for my purposes, focused most of her energy on email. Much of what was said centered around the idea that, as yet, the perfect email system doesn’t exist. And the reason for that is that no provider is meeting all of Sherwood’s standards — many of which have to do with efficiently and effectiveely moving through email in a reasonably organized way.

She chuckles at the notion of “Inbox Zero,” the popular concept that basically mystifies people into thinking they’ve properly dealt with all of their messages just by clearning their inbox. But, have they? Have they adequately addressed that communication channel, or have they simply shifted it from one place to another so as to better manage the guilt associated with 100 unread messages?

Sherwood argues for the latter, asserting that the psychology of seeing “0″ as an Inbox tally is ggiven disproportionate weight in relationship to proper management of email as a communication vehicle — creating a false sense of security, if you will.

Much of that, Sherwood continues, is driven by the passionate pursuit of perfect filtering. Users constantly seeking to compartmentalize the various buckets of information flowing into their Inboxes chew up time that can’t possibly be recovered through the convenience associated with “more easily” scanning through those folders.

In essence, filters/folders/etc. are not effective means of organizing data — given the existence of an uber-powerful search function. Wiith the reality of virtually limitless data storage, it no longer makes efficient sense to try to organize things the way we needed to when filing cabinets held all of our pertinent paper work. Without proper paper management, I might lose a week looking for a single document. Now, I type “2006 tax returns” into the search bar and PRESTO!

In light of that, it’s comforting to know that an advanced search functionality provides the infrastructure for version 2 of Email Center Pro, which is scheduled for release in the next couple of weeks.

So, do the psychological aspects of email resonate with you? Do you struggle against the rising tide of email overload? What is your method for managing your inbox?

Jason Gallic
Product Marketing Manager
jason@paloalto.com

New does not always mean better

It is easy to become enamored with new technology. But, new does not always mean better. Here is the link to a short piece from the Tonight Show with Jay Leno. In this 2005 show Leno arranges a speed contest between two different technologies which both use hand-operated key devices to send digitally-formatted text information via wireless broadcast signals.

The video has been posted on YouTube and other sites for several years, and the quality is rather poor, but then, maybe that ties in with my premise as well.
Click here to see the clip on YouTube.

In this technology test the team using the 170-year-old 19th-century Morse code system was faster than the 21st-century cellphone text messaging team, to the astonishment of the the cellphone team and the audience.

The point is, Beware! Implementing a new technology, a new system, or new gizmos may be cool, but it may not improve your operation nor your bottom line.

Steve Lange
Senior Editor
Palo Alto Software

Friday TV: Start-up Junkies

Start-Up Junkies If you’re looking for a little Friday distraction or are curious what it looks like inside a venture-funded startup, set aside a few hours and catch some episodes of Start-Up Junkies on Hulu.com.

Start-Up Junkies is very reminiscent of the 2001 movie Startup.com, also a fun technology start-up documentary about the first Internet boom of the late 90s.

Both Start-Up Junkies and Startup.com  are interesting to watch, especially if you are a budding entrepreneur looking to raise a bunch of money and enter the sleep-deprived, fast-paced world of getting a technology company up and running quickly. They give you a good view into the stress involved, the personalties you will come across, and what it is like to be responsible for starting a company with someone else’s money. There are good lessons to be learned and plenty of “what not to do” moments.

Enjoy!

–Noah Parsons
COO
Palo Alto Software

Lessons the pros learn and share

I regularly post on this blog about the importance of accurate spelling and correct grammar. It is an ongoing issue for everyone who works with the written word; in education, in any publishing media, in all facets of business, etc.

But don’t think for a minute that I’m preaching from some high seat of perfection. I regularly have my blog posts reviewed by the other two members of our Documentation Team, and they always find some egregious error. [Thanks Teri and Sara!]

It really is impossible for any of us to be correct all of the time. Even the pros make mistakes.

Philip Corbett, the deputy news editor for The New York Times has just begun a new blog, posting “After Deadline,” The Times’ weekly newsroom critique.

As Corbett explains, “The goal is not to chastise, but to point out recurring problems and suggest solutions. Since most writers encounter similar troubles, we think these observations might interest general readers, too.”

Stop by this blog, enjoy the critiques and comments, and improve your business writing.

My thanks to Andy Isaacson of our Palo Alto Software Web Team who sent me the link to this blog.

Steve Lange
Senior Editor
Palo Alto Software