I talk a lot about outsourcing as a way to grow small business turnover and small business capability, but we should also talk about value co-production!

Outsourcing means several businesses working together, to service more customers than they could service by themselves. If you think only small business does this, think again. Almost all big car manufacturers, furniture manufacturers, and other big business do it always.

Value Co-production means that you, and your outsourcing partners, offer discounts to customers so they build their own product. You effectively sell a kit of whatever it is you manufacture. This is often done in the furniture industry, look at IKEA, Homebase, etc. When they talk about “flat-packs” they are talking value co-production, with benefits to the customer:

        1. Lower Price - in return for their own work input;
        2. Transport - the items often fit into in your own car;
        3. NOW factor - customers can take the good now, no waiting for delivery.

Some of the benefits for your small business are:

        1. Lower Cost - due to shortened manufacture cycle;
        2. Higher Manufacturing Output - due to shortened manufacture cycle;
        3. Higher Turnover - products become more competitive in price;
        4. Lower Transport Cost - due to smaller items being shipped.

This all will help to drive down overheads and help cutting costs. Is value co-production for you?

If you are a manufacturing business, it is certainly worth thinking about! ST.

Two professors, Julian Lang and William Bygrave, from Babson College in the US have found that the business performance of businesses started, with or without business plan, was unaffected.

This finding is not entirely surprising, since I believed for a long time, that getting too hung up about business plans can be a great waste of time, especially if you are not in a position to evaluate all variables that make up small business success.

I still believe cash-flow forecasting, SWOT analysis and a simple business goal sheet are helpful as far as business focus is concerned. A full business plan however, in my opinion is often a waste of time.

Some people plan and plan, but never start a business, why is that? If you are looking for problems you will find them. ST.

What is business success? I guess it can be different things to different people, for some it may be the big pay day when they sell the business. For others it may be getting your business to tick over, generate a good income and still have time for your family. Have you asked yourself what business success means for you? It is a question worth asking and answering for yourself!

It occurs to me that being successful in business, whatever your precise small business goal may be, means one thing - Leadership! The simple fact however is that leaders will fail more often than others, so failure has to be part of your way to success. The sooner you accept this, the sooner you will get there.

        Success Is A Staircase of Failures.

Failure is a prize you need to pay for being successful, a leader will know that. If you look at what leaders do, you will understand that failure is an essential part of the course and not such a big problem as society at large will have you believe. The reason for this is quite simply the fact that any problem, in this case being successful, has not a single simple answer. Different strategies will have to be tested and some will not work. This is where you see the difference between a gambler and a leader, or risk-taker.

If you are running a small business, home business or any other micro business, you are probably already successful. Because, here is the thing, it is not the big pay day that is your success, but what gets you to your big pay day is success.

Being a successful small business owner requires commitment, passion and risk-taking, or as some would call it a pioneering spirit. So, don’t complain if the stepping stones to success bruise your feet. Have a great weekend. ST.

I think I have written at length about customer service and how important it is to the success of your small business. Customer service has also to do with knowledge about your products and services, personal development and training is essential to reach this goal.

However, if you think that training is costly, think again. I have compiled some low cost training options for you:

✓ Suppliers - they often run in-house training programs, it is good for them too;
✓ DIY-Training - run in-house training yourself, do case studies;
✓ Experts - if you employ in-house experts, use them for training others too;
✓ Product Testing - get free test product and have hands-on time for your staff;
✓ Literature - start a library for your firm and give staff time to read;
✓ Internet - encourage the use of the Internet to find information;
✓ Volunteer - get staff to volunteer for charity, school or other work, it’s very educational;
✓ Training Grants - often grants are available for training, get informed.

With good customer care and product proficiency your business will convert more customer enquiries into revenue generating business. Training will motivate your staff and help you to be a pro-active and up-to-date supplier for your clients. ST.

Every business, home business, self-employed business should be using online technology to reach the maximum potential of the business in a bootstrapping fashion.

It is not difficult or expensive to be online these days, have a look in your yellow pages to find an it consultant to help you to bring your business online. You can use WinWeb for all your small business online IT needs at a very low monthly cost, so compare prices and see what you get for your money.

There are different aspects of going online, here is a little overview for you:

        1. Web-Site - it is like having a brochure online.
        2. e-Shop - do business online 24/7 and instant.
        3. Blog Software - build a readership and keep in touch with clients.

You could use OnlineOffice with all the added data security and Software as a Service - SaaS benefits. This would leave you free to concentrate on your business and not on your office.

If you are not online, you are not in business. ST.

I think it is clear that all businesses today - big or small - need a website, which has to be hosted. You will find some options here, you can go for the free hosted website or you can can go to a web-hosting company and pay for the service.

Nothing in live is free - so the “free” hosted website will be advertising financed. Maybe you do not care that your website is full of ads for other and sometimes competitive services, than you could consider this option.

If however you want the visitor to read and concentrate on your products and services you need a website without distractions, i.e. advertising. A website is like a billboard, you have 20 - 30 seconds to get someone interested in your services, if they get distracted by ads for 20 seconds, you’re left with 10 max. - I guess you can do the math yourself. There are many web-hosting companies out there who give you good value for money, or you could use WinWeb’s - All you need to run your business! offer.

In my opinion free web-hosting on the above basis is no option for a serious small business owner. ST.

I had many emails regarding my post “Is your competitor for sale?”, the responses show me that some of you certainly have a healthy megalomaniac instinct - good for you!

Here comes the BUT! You need to be careful, for bigger business does not always mean better business. While there is no limit to the size of a bootstrapping business - see Shawn Hessinger on “How big can a bootstrapper be?” - it never the less can be a risky strategy to grow through acquisitions. I put some basic pointer for your consideration below:

1. Businesses come with people and all the associated problems - so make sure the culture fits;
2. Target group should be identical to yours, i.e. serve the same customer base, so you get more turnover for both businesses;
3. Synergies - find them and make them work for you - by sharing resources you can lower the cost-structure in both businesses;
4. Distance - make sure you can easily be in both businesses, so keep it close;
5. Level of debt in the new business - make sure you can handle it easily, don’t risk your current business.

There are other points to consider, so good and trusted advice is absolutely essential. I guess here you will have to decide if you are a gambler (bad) or just a risk-taker (good). Since you made to this point I shall hope you are an entrepreneurial risk-taker.

So, if you are anything like me, you’ll be thinking “Screw it - let’s do it!” ST.

Reading through the small business blogs I read daily, I notice many people still go on about New Year’s resolutions. It is always funny to see that most resolutions don’t last the month. So why do we bother?

The problem with resolutions is that often we promise to stop something we enjoy most - with an undesirable side-effects. Make no mistake about it, keeping a resolution is hard work, no matter if it is for your private life or your small business life. Rather than setting goals we most likely will not realize, we should embrace constant small change and give ourselves time to reach the big goals. It is often said that most good resolutions start too late and end too soon - experience tells us that it’s true.

I try and see my goals as “work in progress”, that way I enjoy the small achievements on the way to the big goal and don’t put myself under more stress with unrealistic resolutions.

May your troubles this year be as short-lived as your resolutions. ST.

One way to grow your small business is to buy another business and merge the two together. When the going gets though, i.e. a recession - many of the non-bootstrapping businesses will be for sale or in trouble. This is the time for you to sharpen your bootstrapping pencil and think about opportunities that present themselves.

If you do not know what to look for here are some pointers:

        1. Customers complain about your competitor;
        2. Employees from your competitor apply for a job with your business;
        3. Competitors loosing the plot, i.e. unrealistically low prices;
        4. Court judgements against your competitor or disgruntled suppliers;
        5. Partners and directors resigning or leaving the business.

Be aware of potential pitfalls, especially if you have never done this sort of thing before. Get your accountant to help you evaluate the competitor and then make a move.

Don’t loose your business focus, however tempting the opportunity. It is easy to damage your business with an uncontrollable acquisition. ST.

Mass Media Advertising for small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants is almost always a waste of money. To build your brand in a market segment is far too expensive and will take a long time. Worst of all, the result can not be guaranteed.

That is why I always rant about bootstrapping, get your product accepted, i.e. someone to pay for it. That is the only way to find out if it will sell. If it sells you can do other things to get more business - trade publications, telephone directories and local papers - get you to your target group fast and cost effectively.

Remember, bootstrapping rule No. 1: Don’t spend money you do not have! ST.