Heather Villa » Good Business

How to Develop Organizational Culture in an E-Business

Heather Villa, CMA, MBA, MSM — Mon, 28 Sep 2009 10:42:25 +0000

It’s a good business decision to outsource: It’s often cheaper to hire outsource staff than to hire in-house. At times, the per-hour cost of outsource staff might be slightly higher than an in-house staff (depending on where the outsource staff is located), but there is less overhead, no payment of benefits and bonuses, and the business can be covered around the clock. More and more businesses today are looking to outsource since business owners need to better manage their time and focus their efforts. And, it’s made so much easier with web-based virtual assistance firms for VA’s and freelancing sites specialists.

But this outsourcing creates an additional issue that businesses are now dealing with: How do you create a strong organizational culture in a business context that includes outsource service providers, virtual assistants, freelancers, and consultants?

The importance of creating that culture is important. After all, you don’t want to have an “us-versus-them” mentality in your business, with in-house staff not appreciating the value that the outsource staff can provide (and the outsource staff not knowing what’s going on). Instead, you want to have a business operating as a strong, single entity focused on keeping your customers happy.

While it can seem daunting to create that organizational culture it’s really not.

It starts with communication. Make sure that you give your staff (both in-house and outsource) plenty of ways to communicate with each other. Email is one way, instant messaging is another, even Twitter might be a good way. (Just make sure that you’re clear in what your outsource staff can bill).

Set up periodic conference calls as frequently as you might set up a normal in-house meeting. For example, a weekly conference call in which everyone dials in might be a valuable way to touch base and keep everyone up to date. Make sure you hear from everyone. Consider using meeting software like Adobe Connect so people can see each other, share desktops, and take notes, just like in a regular meeting. There might be a slightly increased cost in paying wages for the hour-long meeting, but the enhanced, productive relationships that come out of that will be worth the expense.

Be intentional about who you assign to projects. Connect an in-house person with an outsource service provider; don’t just connect two in-house people because they happen to be in the same room when you need the work done.

Team-building is a little more difficult to do in this situation but not impossible. Have a contest, pairing your in-house staffers each with an outsource service provider (or even two outsource service providers), and give them a project or business problem to find a creative solution to. Again, you might initially resist the added cost, but this builds relationships between team members and it’s still way more productive than having your in-house people in a room for a bunch of silly team-building games.

Today’s business is not done in-house. Businesses of all sizes are spread around the globe and require mindset changes. Remember, if you want to get the best out of all of your team members (in-house and outsource) you’ll want to build a strong organizational culture.

About the author: Heather Villa, MBA CMA MSM, is a Business Coach and Entrepreneur. She helps business owners achieve success in operations, productivity, project management, and social media. Read her other articles at http://hireheathervilla.com/resources/articles/ and visit http://heathervilla.com for more information.

You Have Nothing Until You Have Your First Sale

Heather Villa, CMA, MBA, MSM — Wed, 18 Feb 2009 21:12:36 +0000

In my work as a consultant who helps turn ideas into products and business services, I am often approached by a potential client who tells me: “I have a great business idea”…and then they proceed to tell me what it is.

Although I maintain an air of professionalism and would never word it quite this way, the truth is, they don’t usually have a good business idea. They might have a good idea. And it might be sellable. But they don’t really have anything until they’ve made their very first sale.

If you are a small business owner (or someone who aspires to be a small business owner) then listen up: You have nothing until you have your first sale.

Now, I realize that budding entrepreneurs get excited because they’ve designed the next great mousetrap and they’re expecting the world to beat a path to their door. But what happens next? They conduct a market study. They design a website. They start picking out carpet samples for their office. They buy a computer. They hire an administrative assistant.

And they haven’t earned a single penny in revenue.

Forget the market study. Forget the website. Forget the carpet. Forget the computer. Forget the administrative assistant:

SELL YOUR FIRST PRODUCT.

Down the road, you will need the other stuff. And I would advise that you do a market study and website early. But in most cases, probably not first. (Although if you’re selling website design, you might be an exception to my “no website” rule).

Why sell your product first? That first sale will tell you more than a market study ever will. (Note, that first sale will not excuse you from a market study). Your customer’s feedback will be invaluable as you evolve your product or service. The sales process will help you understand what you should do. Who your customer is will help you understand your demographic.

Also, the first sale is the hardest and will tell you whether or not you’re cut out for this kind of thing. (Maybe you discover that you hate sales, but sales are the fuel of every business).

So, create your prototype (or sample or whatever you need to close the first deal) and start knocking on doors or calling up prospects. Transact that first sale. And THEN you’ll be in business!

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When Business Growth is Bad – Part 1

Heather Villa, CMA, MBA, MSM — Wed, 11 Feb 2009 15:12:39 +0000

Did the title catch you off guard? I hope it did. After all, business growth is the mantra of… well… every single business out there. And it seems good. All of it. After all, who starts a business and doesn’t want it to grow? And it seems like the sooner it grows and the faster it grows, the better.

But the reality is, ALL business growth is not good.

Business growth is good when it can be managed and carefully cultivated. It’s good when a business owner can watch the growth and feel good about the pace and where it’s taking the business.

But when a business speeds up faster than expected, problems can happen. Here are a few problems I’ve seen in businesses that grow too fast, and some suggested solutions.

Problem 1: The business’ orders outpace its ability to fill those orders. This seems good, especially if the money is paid up front upon receipt of the order, and not upon delivery. But many businesses accept payment upon delivery. So, imagine that you’ve got a business that normally gets ten orders a month. And the money you earned from last month pays for the raw material for this month. That’s fine. But then you suddenly get 100 orders. Where will you get the money from to buy the raw materials? Will you have a supplier who can ramp up supply as quickly as you ramp up demand? And, if you lack the production capability to fulfill those orders, what will your unhappy customers do?

Solution 1: As bizarre as it sounds, make sure you have a contingency plan in case you grow to fast. If you suddenly get a huge amount of publicity and orders start flooding in, you might have to outsource, work weekends, get a bridge loan, or even buy from the competitors. And that’s just a short-term, stop-gap solution. Long-term solutions need to be ready to go once you discover that your growth is not a random spike but a sustained increase. Of course, you won’t want to buy up extra warehouse space or manufacturing capacity on the vague chance of business growth, but you want to make sure you at least know where you can get it quickly if you need it.

This problem is more common than people think. Have you ever heard the statistic that a depressingly large percentage of businesses fail in their first year? While there are many factors, this is a surprisingly large factor contributing to first and second year business failure.

In my next post, I’ll talk about another reason that some business growth is bad.