Common Mistakes in Running a Business

“No one will work as an employee forever.” This is a short, simple and meaningful statement. Everyone has their own plans either big or small business. Those are long term plan that everyone planned.

However, beside having a good plan for business from location until product lines, there are some common mistakes that most of us have without notice. Those are:

1. “The moment I can sell my products or services, that’s enough.” Business isn’t just about get everyone sold, getting the money and profits from customers. Not so small proportion of Cambodian businessman or businesswoman think that they just get their products or service sold is enough for them. That’s completely wrong, customers are not just coming in, buy their need and they okay, they need something else called, satisfaction. Satisfaction is very important for business, and it’s long-term business source of growth. Once they satisfy with what we provided both quality and service then they will consider to come back and buy more.

2. “Put everything in the store is ready to go.” Have you ever stepped into a store or mart and spend ten minutes to find stuffs that you needed? And sometime you could not find its location in the store or mart? In digital era, people not stupid but also need directions. Put signboard the name of the goods on the shelf would be more helpful for customers to find their stuffs easily and lesser time consume. That also can help to advertise the goods that you’re selling in  your store or mart as well. For example, this morning I went to Tella Mart, I accidentally saw Toyota Oil Filter at the lower bottom of a shelf where I believe super hard to find and see. I was really surprised. If I didn’t accidentally see it, I would never know that they also selling Toyota’s spare parts then. Those issues would be easily solve with just single piece of paper.

3. “Quantity is not as good as value.” Doing business means earning money. The more money you get, the more success you are. But however, with the tough competing market like everyday, high value maybe or maybe not the suitable measurable option anymore. Selling goods with lower price may bring your market-value down if compare to competitors, but in returns you’ll get more in terms of turnover, customers and customer’s satisfactions. For example, if you are selling Avian pure drinking water with a price of $5 per bottle (a 1L bottle) and you can only sell it 20 bottles per day, thus you’ll get $100 per day from Avian 1L bottle sales. But in contrast, you can easily sell 50 bottles of Lyon pure drinking water which priced at $3 per bottle (a 1L per bottle packaging), this means you get $150 from Lyon, higher sales compare to Avian pure drinking water. You see the differences, right? Do not just look into Value, but we should be mindful with Quantity as well. More sales, more money and more growth.

4. “Why I have to share my benefits with my clients?” Currently, with high competing with each other, manufacturers offer plenty of options for their clients, business partners and those come direct benefits that their clients or business partners would get from them. However, their clients and business partners will never share those to their end-users. Why? because they believe that they will lose their benefits as well as their business reputation as well. Those benefits need to be shared through many ways such as discounts, or free-goods.

5. “Just make it done, anything happens will later on solve.” A successful business need to have a good planning and execution as well. Most businesses, especially, family-business here in Cambodia, almost have no business plans, marketing plans as well as long-term vision. They just running their business, once they face obstacles, they will try to solve it. A strong businessman or businesswoman, they can predict the obstacles that would happen along the way and they also prepare a suitable solutions for that. Any business new a good planning. 

6. “I and I alone will manage everything.” It is good if  you can do it because it’ll help you reduct much cost on hiring a manager to help you manages all the stuffs in your store, firm or organization. But however, that kind of management will bring you countless headache, messy and unmanageable situation or problems. Empower people and give them authority to manage a certain stuffs would be much helpful and efficient. Do not try to micromanage your firm alone or you’ll be mess-up everything and also by far demotivate your staffs as well.

These are some mistakes that I, during my working experienced it and saw it. I’ve seen so many business model in Cambodia follow these including some well-know family businesses. That should have change.

Advertisements

Books I Am Reading

Reading is become a part of my everyday habits. I read, write and explore what’s new that help supports my development plan.

There are so many books out there that you could find and read, but these are some books that I would recommend:

1. The 5 Levels of Leadership by John C. Maxwell

This book is very important book for anyone who’s on the way to be a leader, a manager or the one who’s giving an opportunity to lead people. This book will guide you to really understand who you are, where you are at now and what next in a leadership level. It provides you the clues to develop yourself as good leader and help you level up yourself as well.

2. Lead by Example by John Baldoni

How do you lead your team? How do you want your team to me? And how will you help your team? These are questions that you meet see during your leadership period. This book will guide and help you more to understand on how to make an example to others of your leadership and lead them by what they are seeing on you. This book will provides you tips to make sure they your team will follows you without any questions because they want you to lead them.

Business Principles and Management3. Business Principles and Management by James Burrow, Brad Kleindl, Kenneth E. Everard

This book is just collect almost everything about business, including business concepts, marketing concepts and also financial management that support you business. This is very good book indeed. It will provides you a clear vision to really grow  your business and idea as well.

Study will be end once you are no long in class, but learning will never ends, it will go with you until die.

Gain the Pie or Increase Pie Share?

Doing business is competing with others. In an open market like Cambodia, we need to do things aggressively and make sure that we are safe a position that we’re standing. To grow the business, we might think of increase market share, by getting more share from competitors. But there are some companies, they thinks a different way. They ask themselves whether they “should increase the pie or gain the pie”. What’s the different between these two?

Increase Pie or Increase the Market Share is a traditional and quick win strategy. With this business purpose, they would anything to make sure their pie is increase and sometimes, they compromising some risks to get their goal. A lot of companies are stick with this strategy. To increase the pie, sometimes they have to do things unethical or noncompliance. In Cambodia, most of companies are trying to beats their competitors by using resources that sometimes they knows that it is not legal. Doing business by stick with this strategy, sometime, it is not long-term business, because competitors they would find the way to defend, to increase their pie as well and once our company don’t have enough resources to support that strategy, we would definitely lose the share and we’ll really hard to get it back. Increase pie share is not long-term business strategy, in my purpose. Classic example of increase the pie strategy is “Browser” market share. IE, Firefox, Chrome, Opera, Safari, they are fighting with each other to increase their market share in horizontal way. If IE’s market share increase, then Firefox will be decline. They keeping fighting each other in this way and both sites will suffer.

Gaining Pie from other Sources, looking for other opportunities to gain our pie is very important. Opportunity is out there, but we just need to explore, pick it up, polish it and make it shine. Gaining pie strategy is more likely on expand our business to more area, more customers. This is long-term business strategy. We need to invest, we need to explore and expand. There is a few companies in Cambodia that using this strategy, one of which is GlaxoSmithKline (GSK). GSK is trying to do things which other pharmaceutical companies would never imagine. GSK invest in developing healthcare system, by building healthcare centers, training healthcare professionals (HCPs) and increase access to medicine by reducing the price so that people can get the GSK’s quality products. In result, they grows consistently even they have some obstacles along the way. Now their pie is getting bigger and bigger in vertical. This example picture will show what “gaining pie” strategy would look like.

There are so many strategy to run a business, but those only fit if your business plan is fit to what your purpose is. At the end of the day, no matter which strategy you will choose, you’re the only one who’ll responsible for your own business.

Long-term business, result would never come easily, but it would come with reputation and respect. Short-term business is a war.

Why Hi-Tech Device Is Burning Our Money

The world is changing too fast. From day to day, technology is showing its capability in changing our living style and behavior. Hi-Tech devices helping us to see the world in different way, helps to communicate with each other with ease and helping us do business with just a few taps.

But beside of all those pros, hi-tech devices also the “money burner”. Why? Here are some reasons:

  1. Hi-tech – Hi-price: New hi-tech devices always comes with high price. For example, iPhone 6 that Apple had just introduced, many phone shops in Cambodia sold it with very high price, but just after a few months, the price dropped down to almost standard. This marketing method can help those shop owners earn huge amount of money with just a second.
  2. Short life cycle: Once a new product introduce to the market, many people are trying to get one for themselves, but they almost forgot that every product has its own life cycle, and those cycle is just one year. Once the next generation product introduce, the old generation will drop the price and they will lose huge amount of money if they’re willing to change for the new generation product. For example, Sony Mobile committed that they will introduce new product in every 6 months. That’s the best way for those companies to earn money and also the best way for you to burn your money as well.
  3. Add-on features: Newer generation products will be improve in terms of quality and features, but those little added features will burn huge amount of your money while the current one that you’re owning is enough to help you do your business very well. Add-on features are just like a gasoline to boost the speed of a vehicle.
  4. Accessories: To increase the revenue of the company, some hi-tech companies develop separate accessories, so called “genuine accessories”. This is the way to earn more money. To get the maximum productivity of device, you need to pay more on some important accessories, for example, if you want to get the full strength of nVidia Shield Tablet, you need to pay $60 for WiFi Controller and $50 for Cover. There are a lot of companies that doing their business in this way such as Apple, Dell, Microsoft… etc.

Once new product introduce, people are willing to get one without thinking of Price, Cost, Life cycle and Productivity.

Why Working Environment Is Very Important?

Employees spend 8 to 10 hours a day their workplace. Most of their time focuses on making the job done with good result as possible. Workplace means something more than just “a place that they need to come and make their job done”. It’s just like their second home, their second school. This mean, any changes, any problem with their workplace will directly impact to their career, their job and  their future. So, why it is so important?

1. Good working environment mean heaven: Because they spends more than 8 hours a day at their workplace, definitely they would need their workplace to be a perfect place for them so that they can focus and deliver the best result. A good working place will encourage employees to come to the office early, deliver the best result as possible and will never feel depress at work. They will stay with company as long as possible, they will help the company moving forwards. Good working place is every employee’s dream.

2. Bad working environment will affect to both mentally and physically: Imagine if you’re working for a company that have very poor leadership, messy, unorganized, unclear structure etc. With that kind of environment, we might not even have feeling to go, to see or even to work with. Those kind of working place is just like hell. People don’t want to step into it and will never dream of working in that kind of environment. That environment will destroy not just their mental, but also their physical as well.

3. Low productivity at bad working environment: No one work, no one organize and no one responsible for anything and that leads to, what we called, Zero Productivity. How can an employee focus to deliver good result if their workplace is just a mess? How can they deliver good result if no one can lead, share and manage the operation? That kind of working environment is a company’s disaster.

4. Bad working environment is the “career goal destroyer”: Do not dream that you’ll be promoted, or giving opportunities to try higher position in bad working environment, because every employee they would do anything to secure their position and will never let anyone takes it from them. And that will “block” you from achieving your career goal.

That’s very important for each and everyone of us to work with a good environment. Thus, please double check and reevaluate the place that you’re working with or the place that you planned to go, or otherwise, you will end up with high moving frequency.

Do We Really A Marketing Plan?

Strategic-Planning

I believe that everyone of us have our own plan, business plan for your future, no matter how the size of business will be. But before we run our business, we have to think twice about our business plan, and that’s Marketing Plan.

So, do we really need to have a marketing plan?

Marketing plan is not just about plan to sell our products or service, but this is the plan that can make our business even bigger and bigger. Most of us are end up the plan with simple questions: How will we run the business? How our business will look like? How much money will we get from the business?

Money is important, but not in all the cases. You want to run your own business you havet to create a good plan, not just concrete plan, but it has to be an implementable, measurable and achievable plan. So, what you need to think before you run your business?

  1. What kind of business are you going to do? – You need to think and think what kind of business and what kind of product/service that you are going to run. Once you find it out, you would easily to just come up with the marketing plan for it. List down all what you want to do, set the best favorite on the top, the most priority one.
  2. Floating marketing ideas: To avoid of being stress of business marketing, you need to list down all the ideas you have in mind. Put the most important and priority on the top with supporting ideas for that main idea. You might need to think about the conditions that you’re in right now. Put all everything, every persons, very conditions you have in front of you, group/match it together and you’ll come up finally with a very concrete idea that it might be your future business
  3. Marketing planning: Marketing will just easily comes when you identify what you want and love to run in the future. Once you have already chose it, then you might need to have your own marketing plan to support those business. To prepare a concrete plan, you just need to research, and analys the market situation including another companies who are doing business like yours. Those marketing plan doesn’t have to be complicated or very concrete because marketing plan can alwasy be changing along the way as well. Just prepare the plan that reflex to your market. List it down, set the calendar of activities and implement it. A successful marketing plan is not based on how many program, activities that you’re going to roll-out, but it will base on does those plans are relex to the market and will deliver the result or not. I saw many of us are create/putting so many activities in list but at the end, just a few had implemented. And that’s the problem.
  4. Post marketing analysis: This part is really focus on how the impactful of our marketing plan after we implemented it. If it is impactful with positive feedback, then we need to continue with it and explore something more. But it has nothing change or improved then we need to adjust or even change it.This is a very important step. It is a step then we need to measure our succeed.
  5. Explore something new, adapt and apply it: The implest theory to learn and adapt something new is look, learn, adapt and apply. Along with your current marketing plans, you need to explore more about what’s really happening around you. Business and marketing concepts are always changing and that’s the reason we need to learn more and more about it. Remember that, the 1980s marketing concepts will not work in 2010s market. We need to learn something new to fit the requirement of our current market. Marketing plan should update, adjust and add new every semester and you should have your own tracking list to really see where are you now in terms of progress.

These 6 tips are important for each and everyone of us to think before we start to run our own business. These are what I absorbed from what I’ve learned during my 4 working years. I don’t know it will work with you guys or it might conflict to your ideas, or what you’ve learned, but these are the basic fundamental of business opening.

Appreciate your comments! Let’s share the ideas here so that everyon can have the way of new look of running our own business.