Moving from Off Line to On Line

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One of the things I enjoy in working with clients on the financial performance of their business, is branching out into different areas of their operations such as marketing.  A cost effective marketing tool for some business segments is a Quick Response Code.  A Quick Response (QR) code is a two-dimensional code that can be scanned by smartphone cameras to pull up text, photos, videos, music and URLs.  These codes have become mobile-friendly ways to point people in the offline media space to online resources.  The online resource can be frequently updated.

I have seen a few cost effective ways that you can use QR codes to liven up your entrepreneurial marketing strategies.

• On business cards: A fast and simple way to use QR codes for your own professional purposes is to place them on business cards. Generate a barcode that directs scanners to your online resume, small business Facebook Page, LinkedIn Profile, or your website to help new contacts find you or your business faster and to learn more about you.

• On marketing materials: You likely have brochures, programs, handouts, whitepapers and  other materials in your marketing media kit. Add QR codes to direct readers to a particular how-to video, send them to an oline photo gallery, to follow you on Twitter, or point them to a mobile-friendly landing page that promotes a new campaign or a current promotion.  You can use the codes for quick changing promotions.  For example, my restaurant clients can use this for daily specials to help manage their inventory levels.

• In storefront windows: Google is sending out QR code window decals to top local businesses with Google Place Pages and Facebook Places will likely follow. If they don’t send you one, you can generate your own QR code to place in your window. You can use this code to encourage Foursquare checkins or simply invite customers to share memories on your Facebook Fan Page.

When you are marketing this feature you will want to keep in mind that QR codes and smartphone applications are still foreign to many people even if they have smart phones.  More and more people are starting to associate the codes with action, but never assume your customers will know what to do. Make it a point to explain  how to scan the QR code and where they can find applications on their smartphones.

Now, if you don't know how to generate a QR code, Mashable/Mobile has a very effective guide on How to create and deploy your own QR Codes.

How do you see your business using QR codes?

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Business Has Increasing Social Presence with Facebook Places

One way to increase value for your business is to leverage free social media.  In my Blog on Small Business Web Presence I list several good easy options.  With Facebook's Places announcement this week, we now have another tool.  Facebook Places is a reach extension for marketers -- when people check in from a venue, they essentially broadcast their presence to their Facebook network. While Foursquare is known for crowning Mayors and awarding badges from checking in to a physical venue,  Facebook Places will likely have a coupon or some other type of award.  It could be a place they can offer discounts and marketing messages to people within a particular proximity -- whenever Facebook introduces such a feature and cell phones have location services activated.

Marketers with a physical location can benefit from Facebook Places by taking some basic steps.  Business Owners can claim their business's Places Page which will be verified by Facebook.  Likely in the same way Google Places verifies its Places.  Every time anyone checks in from that location, it's a huge deal and business owners will want to control that presence.  About 1.5 million business pages exist on Facebook, and each one can merge that page with their Places page by "claiming it".  If you are the official representative of your business,  take the following verification steps to claim your Place on Facebook:

1. Search for the Place on Facebook you wish to claim as your business. If no Place exists for your business, you can create a new Place.
2. Once you locate the Place for your business, click the "Is this your business?" link at the bottom of the Place.
3. Complete the step-by-step verification process to claim your Place.

This is the link for the Facebook Blog that discusses this in more detail.  There is currently an application available for the IPhone and for other HTML 5 and geolocation phones you can access through touch.facebook.com until those applications are developed.

It will be interesting to see how Google and Facebook battle this one out.  Let me know what you think of this service.

 

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RSA Animate - Drive: The surprising truth about what motivates us

This is a very thought provoking video on what motivates us. It makes we want to revisit company reward and compensation systems. The other aspect of this presentation is how it is presented.  I found the style very effective and it kept my attention.

Quality Everywhere!

On several of my Virtual CFO engagements, I was asked to look at the effectiveness of key operating processes. I had the chance to roll out quality tools and approaches in a lot of different places ranging from an Amish Fine Furniture Maker to cabinet makers in Washington and Florida.  

As part of the Six Sigma quality assessment process, you need to have measures after you defined the process.  In a couple of cases we had existing data, but wanted to engage the production team.  We created a simple manual tracking chart that was placed on the job floor to measure key process milestones.  It was as simple as placing some flip chart paper on a wall with volume lines and dates.  The shift supervisor updated it at the end of each shift and added any notes.

It was interesting to note that we saw process output improvements as we started to measure the process without making any process changes. Other than the act of measuring!  We saw teams beginning to exhibit "one-upmanship" as they wanted to out perform other shifts.  For these businesses, labor and materials were key cost drivers.  Besides working faster, we identified some work flow, floor layout, supply chain, and communication issues that improved productivity and reduced waste.  Several simple paper tools were used to improve the process. On average, the businesses realized over a 20% improvement in productivity that made a noticeable improvement in operating margins and cash flow.

Feel free to contact Steve Cassady for more information on improving your processes.
 

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Shocking Facts You Did Not Know (at least I didn't)

 

Interesting video that Kris Porter highlighted. This highlights how much and how quickly things are changing.  Imagine how much will change over the next 10 years!  Business is always changing.  Entrepreneurs have a lot of technology changes to factor into their business plans over the next several years.  This impacts marketing, customer service, and operations as well.  Technology allows entrepreneurs to better position yourself and to display your expertise in solving customers problems.

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The Real Margin: Economic Value Added (EVA)

I had a "Blast from the Past" question in LinkedIn's Financial Modeling and Analyst Group asking about Economic Value Added or EVA  and Weighted Average Cost of Capital or WACC.  It triggered memories of many late night brain storm sessions with my Sprint Long Distance Division Operations Analysis manager team of Ben Buttolph, Brad Zerbe, Clark Ward and our Financial Management Develop Program rotation participant Mike Ayres.  We actually called our concept Threshold Margins in our Economic Realities Project which became EVA the following year when Sprint Corporate rolled out Stern Stewart's Economic Value Added incentive plan across all Sprint Divisions.  The EVA/Threshold Margin concept is key to a Value Based Management approach that we were promoting in our Economic Realities Project.  I must admit Stern Stewart did have a better name for the concept!  I wish I had read The Quest For Value* before we did the project versus after making our final presentations.

 


EVA is an estimate of economic profit, which can be determined by making adjustments to GAAP accounting, including subtracting the opportunity cost of  capital. EVA is a way to determine the value created, above the required return, for the company shareholders.  EVA is Net Operating Profit After Taxes ( NOPAT) less the money cost of capital. The cost of capital refers to the amount of money rather than the % cost of capital. The amortization of goodwill or capitalization of brand advertising and other adjustments turn Economic Profit into EVA.



Mike Ayres had the task of proving that EVA and Net Present Value arithmetically tie under a variety of scenarios, so management could be assured that increasing EVA creates shareholder value. 

What he proved was that the Net Present Value of a Business Case was the same as the Market Value Added or NPV of the EVA of the business case.

I rolled out a simpler version of this concept to several small businesses and it highlighted that some of the higher operating margin segments did not provide the highest returns to the business due to their fixed and working capital intensity.

Let me know if I can help you understand your relative economic returns of your business segments.



*G. Bennett Stewart III (1991). The Quest for Value. HarperCollins.

Small Business Web Presence

Image by adria.richards via Flickr

One thing that amazed me in my many visits over the past five years to small business clients was the lack of any web presence.  While my engagement was generally involving Financial Planning and Analysis, Operations Analysis, or Fixing their Quickbooks, I always looked at the other key marketing and sales areas and noticed no web strategy.  In my discussions with small business owners, they felt it was expensive and too time consuming to implement.  I showed them that in 15 to 30 minutes of work, they would increase their web presence in a meaningful way. This is important today as 82% consumers use the internet to search for local businesses.   In some cases for those that were local in nature a simple and free registration with Google Places, Yahoo Local, and Bing Local for local businesses give them a free page one listing without even having a website. A small business owner also has many free simple website solutions in addition to Facebook Fan Pages as additional ways to make yourself known.  Yelp and CitySearch MyAccount can also help small businesses.  It will be interesting to see how small businesses can use Foursquare as that location based service expands.

In a couple cases the client was impressed when they received phone calls generated from the free listings before I finished the engagement. Contact me and I can provide you with some simple tools.

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