Lean Business Practices

Blog Credit goes to – Bank of Ireland Group PLC – https://www.thinkbusiness.ie/articles/what-does-lean-mean/

Lean is a term frequently used in the business world, but what exactly does it mean? Simply, lean can be described as creating greater value for the consumer while using fewer resources.

A business adopting lean principles will try to eliminate waste and increase operational efficiency. According to Womack and Jones, there are five principles of lean thinking:

Specific value as perceived by the customer: When it comes to being lean, value is defined by the customer. Many organizations fail to observe a product from the customer’s viewpoint. Products should be created to suit customers’ needs; for example, organizations may need to re-examine the product itself if demand is poor rather than changing marketing strategy. Simply put, when creating a product, make sure that you are addressing customers’ needs and giving them what they want.

Identifying the value stream: The value stream is the entire lifecycle of a product from the origin of the raw material/idea to the finished product. If an organization examines the entire process, it will almost always reveal a large amount of waste (this is known as process re-engineering). If an organization wishes to become truly lean, the value stream must be analyzed and improved.

Making the value flow through the value stream: For the value to flow then waste needs to be eliminated. If the process fails to move forward, then this can be considered waste. A value-stream needs to be created where every aspect of production is completely synchronized with all the other elements. A proper structure, therefore, needs to be put in place to make sure that the entire production stream flows efficiently, thus eliminating waste.

Pulling the value from the value stream: Rather than pushing the product to the customer, you allow the customer to pull the product from you. This pull approach ensures that nothing is created ahead of time and facilitates a much more synchronized flow. To achieve this greater flexibility is required as well as a very short cycle of design and production.

Striving for perfection: An organization that is “going for lean” is striving for perfection; however, this is an ongoing process. Getting value to flow faster will always expose hidden waste that is present in the value stream. What becomes evident is that there is no end to the process of reducing all the waste factors such as time, cost and mistakes. The company must always strive for perfection.

10 Tips for Starting A Small Business

If you’ve thought about opening your own business, you might have begun to look for advice. There are so many tips for starting a new business out there that choosing which ones to follow can get confusing.

As a seasoned entrepreneur, I can tell you that there is no perfect formula for starting a small business. I’ve learned that the best business advice usually forces you to think in a new way. So, I’ve compiled a list of tips for starting your own business that you might not have heard.

Tips for starting a small business

Opening your own business is often a learn-as-you-go process. But, the more smart decisions you make early on, the better chance your company has for success. If you have an entrepreneurial idea, try these ten tips.

1. Address excuses

Today In: Entrepreneurs

Countless people dream of becoming entrepreneurs, but they never do. They’re burdened with excuses and fears of failing. From money to time to responsibilities, you can make a million cases for not starting a business.

Let’s face it, being your own boss is scary. In most cases, new business owners have a lot to lose with little insight into their chances of success. Worrying about the risks of business ownership is normal.

But, excuses only slow you down from reaching your goals. If you really want to start a business, you need to address the reasons you think you can’t start a business and get rid of them. Find a solution to the issue rather than let it hold you back.

2. Absorb everything

Listen to what others have to say—friends, family, experts, even yourself. When it comes to things that have to do with your entrepreneurial goals, be a sponge. As you learn, start to work out the idea in your head. Write things down. Keep notes from all the resources you come across to develop a detailed plan.

When you tell people about your startup, read their body language. Do they like the idea? Or, are they just being nice and really think you’re going in the wrong direction? Encourage your listeners to be honest with you. The collective opinion you get from peers could be a reflection of how consumers will react.

Don’t ignore the power of advice from experts and veteran business owners. These folks know first-hand what does and doesn’t work. Smart entrepreneurs learn from the mistakes other business owners have made.

3. Be a solution

Rather than starting your idea with what to sell, think about what it will solve. It’s a lot easier to gain a solid customer base when your business is fixing a problem. Your startup should fill a hole in a certain market or niche.

For example, I didn’t create Patriot Software just because I had a passion for software. I wanted to solve an issue that small business owners like me faced. After doing some research, I found I could provide payroll and accounting software that is easy-to-use and affordable.

Home in on why you are opening your own business. Understanding your motives will help you create a brand and market your company. Know what problems your target customers face and how you can solve them.

4. Keep it simple

If you’re like many entrepreneurs, you have a business idea and you’re ready to run with it. Be careful not to let your concept snowball into something overcomplicated. You could end up with an expensive, elaborate end-product that nobody wants to buy.

As a new business owner, try to start small and narrow your focus. Learn how to test your business idea. Create a simple, quality good or service. A successful business idea should fulfill promises to customers and exceed expectations.

Cut unnecessary features that water down your offerings and cost you money. As a small business, you don’t need all the bells and whistles of a giant corporation. It will be easier to add to your business as it grows.

5. Count the costs

Once you start to develop your business idea, add up how much it will cost. You will need to factor in every business expense necessary to launch and operate. Some costs to keep in mind include your location, rent, supplies, marketing, and more.

Come up with the most educated number you possibly can. Then, take whatever you think that dollar amount is and quadruple it. Seriously, quadruple it. You’ll experience unexpected costs of running a business around every corner. It’s better to be over prepared than short on funds when bills start to roll in.

When you’re thinking of the cost to start a business, don’t forget about your personal budget. Look at how much money you need to live, including rent, food, gas, healthcare, etc. Lay these expenses out in order of which ones you must pay (e.g., mortgage) to ones that can slide if the money runs out (e.g., entertainment).

Once you have a grasp on all your expenses, start to create a business budget. At first, you might need to get some outside capital to make ends meet, like a small business loan. Go over all of your options before putting your money into the startup.

6. Imagine yourself with zero money

I mean zero. There is a high probability that this will happen. I’ve had several businesses not make it for the long haul. And, I’ve come close to bankruptcy.

Launching an unsuccessful business idea is a reality for many entrepreneurs. Over half of new businesses fail within the first five years of opening. How would you handle having no incoming money?

It’s a good idea to come up with a “just in case the worst outcome happens” plan. You might need to get a job on-the-fly or temporarily live with your parents. You might have to go without comforts that you’re used to. Figure out how you would get by if your business plan went south.

Look at your current sources of income. What do you earn from your current job? How long would your savings last if you quit? What unexpected things could mess up your plan (e.g., you wreck your car or your furnace breaks)? Prepare yourself for all the situations that could happen if the business idea doesn’t work out.

7. Earn while you build

If you want to start a small business, don’t quit your day job—yet. Launching a successful startup is a process. Build your business in stages and gradually transition from employee to entrepreneur.

As a new business owner, it will take some time to earn a steady income. Keep your nine-to-five and work on the business during off hours so you can earn during those tough, first stages. Once you have a healthy inflow of cash from your company, you can tackle business ownership full time.

8. Speak up about your business

One challenge many business owners face is that they don’t know how to sell. It can be intimidating to share your business with the world, especially when you’re new.

If you’re worried what people will think about your business, you need to get over it. If you can’t convince consumers to buy from you and support your company, it’s difficult to make money. Not outgoing? Fake it ‘till you make it. If you really want business success, you can’t afford to be shy.

In my early days as an entrepreneur, I had to to do public speaking for the first time. Back then, I didn’t have any training or experience in talking to large groups of people, not to mention I wasn’t very keen on the idea of facing my worst fear.

But, if I wanted my young company to succeed, I need to to get out of my comfort zone. This came in the form of planning and hosting nearly 70 three-day conventions for my customer base of network recruiters.

I can’t begin to tell you how afraid I was. As it turned out, I became a lot more comfortable in front of people after speaking at the conventions. Though I was more introverted than extroverted, I learned to “put myself out there” for the sake of my business.

Be ready to speak confidently about your business, even if it makes you uncomfortable. As a new business owner, you will need to market and network constantly. From networking with clients to negotiating supplier payment terms, you must be able to communicate.

9. Know the legal requirements for starting a small business

Starting a business is exciting. Laws are not. But, you need to understand the rules that come with opening a business. If you fail to follow government regulations, you could face steep penalties.

From forming a legal structure to setting up an accounting system, you must follow laws. You need to register the business with your state. You must also take care of business-specific tax liabilities. And as you hire workers, you need to follow employer laws.

The rules that apply to you depend on your state, business structure, and industry. Consider talking to a small business accountant as you set up your company.

10. Balance passion with wisdom

One of the most important ingredients in a successful business idea is passion. Passion will consistently drive you to improve your process so your business grows.

That said, don’t let passion take over all your decisions. Passion will move you forward, but knowledge will point you in the right direction.

Conduct market research on your industry and talk to target customers to find out your business’s potential. Ask experts questions about launching a startup. Reach out to professionals that can help you with certain areas of business, such as financial advisors and lawyers.

As your business starts to come together, think of it like driving a car. Let your passion hit the gas pedal and your mind control the steering wheel. That way, you can be confident about the direction you’re headed and sustain the momentum you need to get there.

Mike is the founder and CEO of Patriot Software, LLC. He has over 30 years of entrepreneurial experience across five startups. He started Patriot Software in the basement of a factory and grew it into a multi-million dollar company that serves small businesses all across the United States. he knows what small business owners and entrepreneurs face because he’s faced it himself. For more information, please visit Patriot Software or Follow: @PatriotSoftware on Twitter.

16 Tips for Business Success

Starting a business? Here are 16 important startup tips that will help you make your startup a success.

What do you need to do to start a business? There are dozens of websites including ours that have checklists that remind you of the many tasks you should perform when starting a business. Although such checklists are very useful because they help you remember important startup steps, they are just To Do lists. They tell you what to do, but don’t provide any tips about what makes a business successful.

Unfortunately, you don’t succeed in business just by completing a list of tasks. Nor will your business be a success just because you think it’s a good idea.

What will make or break your business? What determines if it will be a success?

Here are 16 tips for starting a business and making it succeed.

  1. Know yourself, your true motivational level, the amount of money you can risk, and what you’re willing to do to be successful. Sure, we all want to make millions of dollars. But what are you willing to give up to reach that goal? How many hours a week will you work on an ongoing basis? How far out of your comfort zone are you willing to stretch? How far will your family stretch with you? To be successful, keep your business plans in line with your personal and family goals and resources.
  2. Choose the right business for you. The old formula – find a need and fill it – still works. It will always work. The key to success is finding needs that you can fill, that you want to fill, and that will produce enough income to build a profitable business.
  3. Be sure there really is a market for what you want to sell. One of the biggest mistakes startups make is to assume a lot of people will want to buy a particular product or service, because the business owner likes the ideas or knows one or two people who want the product or service. To minimize your risk for loss, never assume there is a market. Research the idea. Talk to real potential prospects (who aren’t family and friends) to find out if what you want to sell is something they’d be interested in buying, and if so, what they’d pay for the product or service.
  4. Research your competitors. No matter what type of business you are starting or running, you will have competitors. Even if there is no other business offering exactly what you plan to sell, there is very likely to be other products or services your target customers are using to satisfy their need.  To be successful, you need to research the competition and find out as much as possible about what they sell and how they sell it. Competitive research is something you should plan on doing on an ongoing basis, too.
  5. Plan to succeed. If you’re not seeking investors or putting a huge sum of money into your business, you may not need an elaborate business plan, but you still do need a plan – one that specifies your goal – your destination – and then lays out at least a skeletal roadmap for how you’ll get to where you want to go. The plan will change as you progress and learn more about your customers and competition, but it will still help you stay focused and headed in the right directions. Use our business planning worksheet to help develop that basic plan.
  6. Know the Operational Needs. Most people who are thinking about starting a business focus on what they’ll sell and who they’ll sell it too.  What they often don’t consider is how the business will actually operate. For instance, if you’re selling items, how will they be delivered? How much customer support will be needed – either to answer questions about the product, or to respond to people whose shipments haven’t arrived? Will you need to accept credit cards? Will you invoice customers? Who will follow up to be sure you’re paid? Who will build and maintain your website and social media presence?  Will you be able to use a virtual assistantfor such tasks, or will you have to hire employees? Even if you’re starting a small personal service business, these are issues you should consider and plan for.
  7. Don’t procrastinate. I’ve heard some people advise would-be business owners to not move ahead with their business until they have investigated every last detail of the business they want to start, and are absolutely sure it’s all going to work and be profitable. The problem with that approach is that it leads to procrastination. No one ever really has all the pieces in place – even after they’ve started their business. Yes, you need to research the market, have a rudimentary plan in place and do things like get a tax id if needed, register with local officials, if required, etc. But if you try to make everything perfect before you launch, you may never get around to starting the business at all.
  1. Start on a small scale before going all out. Some people believe that entrepreneurs are risk-takers. But for the most part, successful entrepreneurs don’t like walking blindfolded on a limb. Instead, they take controlled risks. They test an idea on a small scale, then build on what works well, tweak what shows promise and discard the disasters.
  2. Don’t fixate on mistakes or get demoralized by them. The difference between successful people and everyone else is that the successful people learn from their mistakes and move on. They don’t dwell on failure, blame the economy, curse their bad luck, or blame other people for their fate. If the path to their goal is blocked, they look for an alternate path, or sometimes choose a different, more attainable goal.

    Free Business Startup Checklist

    Starting a business can be overwhelming! Use this free Business Startup Checklist to make sure you don’t miss any important steps. This downloadable Word document lists the steps you need to take to get your business up and running, and includes space for you to note your own comments and deadlines. You can get the checklist free when you subscribe to the free Business Know-How Newsletter.

  3. Learn from others. Find mentors, join groups with like-minded people, learn everything you can about your industry and what it takes to get from where you are to where you want to be. Attend industry conferences. Take training courses when they are available. Buy courses offered by experts. You’ll save a tremendous amount of trial and error by learning from people who have been there before.
  4. Think of what you do AS a business. Keep track of income and expenses, keep business money separate from personal funds, find out what regulations your business needs to abide by.
  5. Understand the difference between working for yourself and building an ongoing business. If you want to build a business, you need to develop systems and methods that allow you to hire other people to DO the work of the business while you plan it. You limit the potential for growth if you don’t bring in other people to work for you.
  6. Get to know investors. If the business you are starting will need investors to grow, do what you can to find out what investors are looking for and where to find those who might invest in your kind of business. Local angel and venture capital groups are a good place to start – attend meetings they hold or meetings that investors are speaking at.
  7. Put yourself out there. Ask for what you want (in a polite way.) I started my online business by participating online on GE’s GEnie online service. When I was ready to send them a proposal to run a small business area, I could not only talk about my credentials in general, but point to places I was already contributing to their service. I became one of the early content providers to America Online because I picked up the phone and made a cold call. I wound up with a new consulting client after I struck up a conversation with a woman sitting next to me on an airplane. Remember, people like to do business with people they know. Get the ball rolling, and keep it rolling by continually reaching out and introducing yourself to new people.
  8. Embrace Digital Marketing. Even if you’re running a local business, you need a comprehensive digital presence. At minimum you need a professional-looking website, an email list that lets you communicate with customers and prospects on a regular basis, and presence on the social media channels that your customers frequent. While you may get many of your customers by word of mouth, referrals or networking, you still need a strong digital presence. The reason: prospective customers are likely to look you up on the web before they decide whether or not to contact you. Coupons, special offers, and practical information sent to your email list can encourage customers and prospects to buy from you or make repeat purchases.
  9. Never stop learning and trying new things. What’s profitable now, won’t necessarily be profitable next year or 10 years from now. So, don’t let yourself fall into the “this is the way I’ve always done things” rut. Keep your eyes and ears open for new things. Are there newer or better ways to market your products and services? Are customers asking for something you’re not offering? Is there a different type of customer you should be targeting? Get answers by reading everything you can about your industry and listening to your customers.

© 2018 Attard Communications, Inc. All Rights Reserved. May not be reproduced, reprinted or redistributed without written permission from Attard Communications, Inc.

About the author:
Janet Attard is the founder of the award-winning  Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets.  Follow Janet on Twitter and on LinkedIn