Doing busines fighting against uncertainty

Just back from my last business trip, I take a moment to meditate a bit on what is going to happen in next months. Which customers will continue cooperation with my company and which of them will unfortunately finish it.

uncertaintyWe are still experiencing tough times. Economic downturn is still “alive and kicking” and an element still affecting the day by day activities is uncertainty.

After founding two companies since 2009 I can say that the most unpleasant element which is always present everywhere is what I just mentioned. While we are fighting to maintain customers and do our best to expand their business, many times is hard to take strategic and managerial decisions because we are not able to retrieve all the elements we need.

First of all, and this is the most important one, because affects our balance-sheet is payments. Today many companies are working in a so called “limit situation” that means, you are the last of a chain of payments.

If your customer doesn’t receive money you are not paid or you are paid with delay. Another reason could be represented by the fact that you are considered as low priority because you are a consultant. Customers prefer to pay their employees first and then you. Again we are talking about delays. In this case I recommend avoiding dealing with customers paying you with too much delay. It’s better to look for new customers paying you less but regularly.

Anyway there are many other elements that influence this status of uncertainty like unclear sales strategy, management not properly willing to take decisions which may be very important for the future development of the company, products roadmaps not really established and respected, bad product performance and so on.

Having to deal everyday with this kind of “not so motivating” environment is quite expensive in terms of efforts and of course proper motivation. The unique way to fight against this is work at the highest level of quality and deliver a best in class service even when is not easy at all. This is the differentiator you must always show to everybody.

Today you are obliged mainly to live our business in this way and, above all, if you want that your company survive for the followings years, you are obliged to increase as much as possible your customer portfolio using a tactic I use to call “tireless”.

For doing this work up to 16 hours per day, trying to maximize my presence in social networks, maintaining up to date my company’s documentation for marketing and going to selected events where you can meet potential customers.

In this way, even I know is really hard, I can assure you that my business is going quite well and customer base is increasing, permitting me to be quite satisfied and happy to look at the future with a positive feeling.

You can ask why we should do this. The reason is quite simple. Customers acting in the way I described before are often unable to face the market in the proper way and sooner or later they will face serious problems. I experienced many cases where companies even closed forever. If you work with such kind of customers is quite sure that unfortunately you are going to lose them.

The market today is requesting high performance (see my previous post), good corporate image, best in class products and services. Competitors are so strong that you can win them only demonstrating that you are really better than them and, as you can see, is not always so easy.

Think Local, work global

Once again I would like to discuss, new business tendencies and above all rules I apply with my customers. Some days ago I was watching TV and suddenly I heard this sentence, “Think local and work global “.  This sentence could have different meanings; I try to tell you what I’m thinking about.

From my point of view, I think that actually is really important for many companies trying to local-globalwiden their market abroad. Italy for example has many companies mainly SMEs with a huge knowhow and an innovative product portfolio.

Unfortunately they are able only to move locally, they hire locally, design locally, as a matter of fact they do everything locally. Today new global markets oblige to widen strategies to new international markets. Local markets are getting smaller and smaller.

For this reason entrepreneurs must address new international markets, working global but preparing themselves and think about new strategies locally.  Locally we have a huge potential but it must be managed, morphed, adapted and above all customized to make these companies successful.

I’m experiencing different industrial environments and I can say that there is a fundamental problem in those companies.

A lot of managers and executives aren’t able to prepare their staff properly because they don’t think too much about how to face global markets before starting operations. I mean that a lot of preparatory activities are missing: market assessment, products potential or key differentiators, selection of international partners etc, etc…

It seems impossible but is like that!

Again “think local and work global” sounds so important, that I want to stress it again and again.

2012 was a really though year and 2013 at least the first months will be complicated as well.

A lot of SMEs must improve themselves as quick as possible in order to be competitive, managers should “think” how to involve personnel to find the way to increase revenues, towards a continue analysis and improvement of processes.

At the end of the day think that “globalize” business doesn’t always mean externalized activities and production abroad in the so called “chip manpower countries”. My recommendation is to focus on quality and think that coordination and steering must always be local, paying attention to international activities but maintaining control in your Country.

Is a way to assure that your brand, style or recognized services is well protected and supervised.

How I deal with entrepreneurship

Entrepreneurship has become a way of working since some months. I should say that I’m quite happy and satisfed about that. My startup company is performing quite well. First months revenues and margins are in line with my targets and we are receiving many cooperation requests.

I take this occasion to share twobusiness point that I consider quite important for whom has a company like me or is going to think about founding one.

First point. Apply since the beginning a Cost Reduction policy.

Nowadays it’s quite mandatory to avoid useless expenses. Try to maintain assets extremely reduced. If you are not able to invest some money for an office rent, go to a business center: it’s a chip solution which cost really nothing. For example, When you need a meeting room for an important occasion, rent it that same day.  If you can avoid loans, better. I know that this depends on your activity and that sometimes it’s necessary if you plan to produce goods. What I want to say is that in case you must request some money to banks, capital ventures organizations, business angels etc, prepare the most accurate business plan having under control requested interests, contract constraints which could be a potential cause of problems.

In m y case, talking about sales outsourcing services I didn’t have to ask for loans. It was enough capital invested by me and my partners. Of course you need to prepare contracts that includes fixed fees related to different activities performed for and with your customers. In addition to that you have a variable part of your payments related to sales. This drives me to the second point of my thread, Customer selection.

Second Point. Customer selection.

During my first activities as a general manager of my company, one of the mandatory issue to be solved was to have a bunch of customers which permit me to start having revenues with a  reasonable timing and that could accept a fixed fee. Is quite well known that if we are talking about sales, customers are telling you: “give me a deal  and I’ll pay your commission…but don’t ask me a fixed fee”.

I know that is difficult to select customers but especially nowadays is a must. For two main reasons: be sure that they are going to pay you (Accurate rating to be done previously) and have someone that can accept to pay you a fixed fee, vital for your company.

How can you make your customer accept a contract with a fixed fee? Studying its needs and offering  a dedicated service scheme with defined activities and targets. If possible adopt a scalable fee scheme too, better  avoid some unexpected reactions to your requests.

If you have customers that are not so profitable, or  pay you only on provisions,  think to eliminate them as soon as possible or dedicate them less time and priority.

So I thing that resuming what I’ve just written, being an entrepreneur sometimes is not easy but it can be really satisfactory even in a downturn situation. Being careful with expenses and customer selection is a must, and is a tremendous drive for a company success.

New career perspective

After a long time working in a big international holding: Siemens before, Nokia Siemens Networks after, I decided to move towards a big change in my life: to become an entrepreneur.

Filomena Scalise / FreeDigitalPhotos.netThe decision has been taken not so fast. It was just medited during some months. A period where I just wasn’t so happy of my career’s perspective while working in a “new” company without feeling myself part of it.

Now I can say that I’m very happy and exited in my new position and I hope to be able to maintain this blog updated quite often. My intention is to share my new experience with as many colleagues and friends as possible.

I know that economic downturn is still present but I know also that something is changing. I see a lot of Companies that are looking for new markets to be developed in addition to their national ones. I’m experiencing a big networking with existing and new companies that want to invest in new innovative projects which could last for years: sustainable energy, renewable resources and of course telecommunications.

I’m sure that 2010 will be a great year and want to wish all the best for the coming months.