Latest / The SmallBizChat with Melinda Emerson / Developing your Business Strategy for 2021 with Martin Harshberger

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Developing your Business Strategy for 2021 with Martin Harshberger · The SmallBizChat with Melinda Emerson

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  3, 10, 1, 0, ignition, liftoff,
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  Ending small business failure.
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  Welcome to the Small Biz Chat podcast with a number 1 small business expert Melinda Emerson.
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  Bolinda's goal is to end small business failure, and she'll give you the information
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  you need to succeed and live the life you've dream of.
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  Now here's the small biz lady herself.
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  Melinda Emerson.
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  Hi, everybody.
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  I'm Melinda Emerson, the small biz lady, and what to the small biz chat podcast.
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  I'm small biz lady, America's number one small business expert, and I am excited to welcome
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  you to today's show.
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  Today's show, it's all about developing your 2021 business strategy.
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  If you need a new strategy for where your business is gonna be going, in the new year.
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  Well, we've all been affected by the pandemic, and you're in the right place.
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  Smallish Pat is Really, it's a live peer to peer interview show that gives small business
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  owners a way to get and share valuable information and advice The mission of small
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  business chat is to end small business failure.
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  And today's show is featuring 3 live guests, and we are also broadcasting from my small
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  business lady Facebook page, my YouTube channel, and we're streaming live on Twitter
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  via Periscope.
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  On small fish chat live, our goal is to give our small business audience an opportunity to
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  hear sage advice from multiple angles to grow your business and take to the next level.
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  So with that, I would love to introduce my guest, Martin Harshberger.
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  He is a small business consultant and business advisor.
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  He's worked for a fortune 500 company for 15 years doing turnarounds, and then he's added a
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  value added logistics company in Memphis, Tennessee, After 10 years, he sold his stock in
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  the company and became a highly sought after business consultant to small and medium sized
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  businesses.
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  Martin, welcome to Small Bishop Live.
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  So let's just jump into this because I think that is something that's really important.
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  And I think a lot of people think they have a strategy, and they don't always have a
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  strategy.
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  Isn't that right?
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  Let's talk about how strategy ties into really overall leadership in the business.
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  What do you think are sort of like the most important attributes of a successful small
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  business leader today.
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  Well, go back to strategy.
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  I think you're exactly right.
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  Most small and even mid tier businesses don't have a strategy.
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  And when you're talking about it, they think it's a large corporations.
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  When you talked about 2021, I think you have to look at 2021, almost as a start up.
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  There are a lot of companies that have been down and, and really go back and do a strategy
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  and do an in-depth strategy that lets you understand your own business in your market as
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  well as actually better than what you know now.
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  I think that's exactly what it is.
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  2021, you gotta look at it because nobody knows what's gonna happen.
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  So you better have all your angles covered.
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  Right?
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  I completely agree with that, but I also wanna take it back to something that one of my old
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  strategy professors said in graduate school He always said that strategy was about
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  competition, and that it was about creating value in your business that is not easily
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  duplicatable by your competition.
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  It's a value proposition, and I could tell you most companies don't have have never done that
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  because they haven't done a strategy, haven't done the work, create a value proposition.
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  They have to sell on price, which most of my clients when I run into them, it's exactly what
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  they're doing.
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  They turn themselves into commodity by not differentiator.
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  Yeah.
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  And I know selling on price for a small business, that's bad for business.
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  Right?
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  Cause it seems like a race to the bottom is a race you don't wanna get into.
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  Right?
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  Exactly.
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  Yeah.
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  You can always be, anybody can under price you for, especially if your small business has gone
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  a lot of cash, so anybody can under price you for a finite amount of time and put you in that
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  specific position.
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  That's exactly what I was thinking.
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  So listen.
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  Let's talk about what's going on right now.
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  1 in 5 businesses has stopped operating and really has is presumed dead.
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  Right?
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  And many businesses are still on the brink of going under And now the coronavirus numbers are
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  going back up, I mean, what do you think people should be focusing on right now to save their
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  business?
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  Clarity.
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  Exactly what you're gonna do and what you're not gonna do.
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  I mean, I think what you're not what you don't do isn't what I'm working right now.
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  I think you've gotta look at that revenue sources.
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  You can look at high margin revenue sources, manage cash, reduce costs, because you don't
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  know what 2020 months gonna look like, or how long it's gonna take to recover or So I think
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  if you're still there, that's what I tell my clients, if you got low margin business, you
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  almost you can't hire people from low margin business and make So you gotta try to pick your
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  pick your revenue sources and stay with it.
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  Okay.
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  So what would you say to somebody that actually had to close down?
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  And they're trying to figure out, you know, what's next.
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  That's a tough question.
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  I don't know if there is an answer.
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  It depends on market, I guess, but like some of the retail or or restaurants, don't think there
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  are a lot of misconduct.
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  You mentioned that they don't have a deep cash reserves.
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  I was working with a client right before at the and then it hit, well, because of the refinance
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  of Crest VA for a pretty good refinance package.
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  His first quarter strong.
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  The 2nd quarter disappeared and blew away the opportunity to refinance.
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  So, I mean, he's in detail just for that quarter.
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  So I don't I don't have an answer for that.
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  If I did, I'd be I'd be a lot smarter than I am, I guess.
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  Well, I mean, the way I kinda look at it is if your business went under in the pandemic, if
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  when you get yourself back on your financial footing and you're able to start another
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  business, you're gonna be smarter.
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  Right?
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  I mean, you're gonna be better because you would learn this expensive lesson.
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  I mean, I kind of feel like all of these things are lessons.
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  Right?
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  I think some people get stuck on the word failure.
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  Right?
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  You're like, and they feel like failure.
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  I think there's a difference between failing and failure, right?
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  And I think that sometimes people focus on failure like, like, a more personal thing
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  versus looking at it, like, failing.
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  You know?
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  And these
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  are the times you can kind
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  of you don't know where the there's landing after the shutdown.
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  I mean, if they've got loans in trouble, that kind of thing, it's gonna be hard for them to
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  come back.
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  You know, there's a bottom right now that wants us trying to get banks there.
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  And over here, it's gonna be a tougher, tougher sell.
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  Now the good news is there's no real hurry for the bank to foreclose on them because
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  equipment, so I'm gonna able to sell it.
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  So they may be able to restructure something that the bank is working there, but I don't
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  most of my clients have outstanding loans, credit lines that come in.
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  So
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  Definitely.
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  Definitely.
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  Well, what industries do you think are still growing?
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  You know, we're we're obviously in sort of like a recession air you know, economy right now.
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  If you were gonna scale a business or build a business right now, you know, what industries
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  would you be looking at potentially investing in?
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  Autos coming back, for sure, starting to, they say housing is starting back, which is good for
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  a lot of clients who, like, got a client that makes, industrial seals, or if he is, rises and
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  falls with construction.
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  So, I mean, a lot of it just depends on what the market comes back.
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  And right now, oils down.
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  I have a client.
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  It's it does a lot with oil, gas, or fracking.
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  Nobody knows what it's coming in.
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  So, yeah, it's just I think it's market dependent.
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  Like, another issue with suppliers, you know, when you do come back, is your supply chain
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  solider, have they, have they gotten into trouble So I think a lot when you're coming
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  back as part of the strategy because gotta get a backup for your suppliers and understand what
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  condition they're in.
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  That's a very legitimate point.
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  I do think one of the things the pandemic really do decimate is supply chain.
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  Right?
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  I mean, supply chain has really been damaged.
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  I mean, we live in an era of global supply chain.
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  Right?
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  So, I mean, you know, supply chain was definitely damaged for people, you know, large,
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  you know, manufacturers, you know, mass manufacturers, but even people manufacturing
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  stuff in the US.
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  I mean, supply chains got messed up here because people couldn't get raw materials from
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  wherever they were getting
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  them from.
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  1.
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  Well, the chemicals come from China, and when the pandemic hit, they shut that down.
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  What happened?
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  The one of
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  the large companies brought up, which was there, and the smaller companies were We're in
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  trouble.
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  Sure.
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  Sure.
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  Well, smaller companies always tend to be in trouble.
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  So so let's talk a little bit about one of the things that I think people struggle with as
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  they start thinking about business strategy is I think people mistake operational excellence
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  for a strategy.
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  Like, we just wanna be good at what we do.
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  Well, everybody can be, you know, operational excellence is something anyone can aspire to.
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  But value having a real value proposition is different.
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  Can you talk a little bit about the the difference?
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  I'll give you an example.
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  Point client that was in a, was in a commodity based business, but he was doing a lot of R and
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  D, new product development for clients, and then the client would take the product put it
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  out the bid to see if he was gonna make it or somebody else.
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  So we backed him up and said, you're not gonna be in that.
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  You're not gonna be in the commodity business.
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  We're gonna be an R and D company that actually makes So he stopped dealing with the purchasing
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  manager that was do his price sensitive.
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  Started being on engineering, so he started inspecting his products rather than you know,
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  he did a market share.
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  It was a it was a gutsy move on his part, but it really worked out well.
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  Oh, definitely.
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  You wanna be in on the RFP being developed all day.
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  Right?
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  I mean, that's That's a great way.
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  That's a great way to ensure that you're always the number one supplier.
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  Right?
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  Absolutely.
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  Yeah.
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  So there's a lot of ways to develop a di competition.
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  I mean, it's service, or it's gotta be something that that sets you apart in the
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  competition, basically.
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  Customer views you the same as everybody else.
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  She looks at two things price and delivery.
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  Right?
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  Sure.
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  So I know that you say that we percent of businesses don't have a documented strategy.
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  And then you said that of those that do only about 1% act actually execute their strategy?
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  Well, what do you think is missing?
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  Oh, that that was in the balance work where I think it was 10%.
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  I did some work with There's name on the defense to affiliate.
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  You're just talking about that as well.
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  It's accountability.
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  I mean, top management usually delegates it down to departments, to middle management, and
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  never reuse it, never it holds anybody accountable to one issue.
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  They won't review it regularly.
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  The second thing is compensation.
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  When you when you do a change initiative or strategy and you delegate task down the line
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  and you compensate them for day to day profitability, what gets what gets the focus?
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  Right?
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  I mean, nobody looks at the change of issues.
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  I
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  totally, totally agree with you, but here's what I wanna do.
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  Let's put a pin in that.
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  And when we come back, We're gonna talk even more about, you know, leadership capacity in
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  small business.
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  I'm Melinda Emerson, the small business lady, and we will be frank Hi.
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  I'm Melinda Emerson's small business lady.
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  wait.
• 10:46
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• 10:50
  life.
• 10:50
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  how to grow your business revenue, how to hire great people, and streamline your processes,
• 11:00
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• 11:02
  Grab a copy today, affix your business, and get your life back.
• 11:08
  Welcome back to small chat live.
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  I'm Melinda Everson, the small business lady, and my guest is Martin Harshberger.
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  We're talking about how to boost your leadership to better execute this strategy.
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  In your small business.
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  So, Martin, why is leadership so important in a small business?
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  And and what can you do to develop your leadership skills?
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  Oh, there's a lot of leadership programs out there.
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  But, again, if you do any research on that, leadership programs typically don't work.
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  They don't add value.
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  And the reason they don't add value is there's barriers to to change.
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  I read a a article in the Harvard Business Review a couple of months ago, and it was
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  really quite well.
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  They said the strength of the people receiving the training is not sufficient to overcome the
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  inertia of the company that keeps it going the same way.
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  So you know, to just do leadership, you've gotta get down and look at barriers to
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  execution down down lower in the organization.
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  It doesn't happen.
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  Leadership's important everywhere.
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  And every time I've done a strategy, session with a client.
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  Leadership always falls out.
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  There's only something there, but I think there's something missing in in the leadership
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  development.
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  You can teach a person to change the organization.
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  It's a different thing.
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  Well, I mean, okay.
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  So if you're training people, but you're not changing the organization, How do you fix that?
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  Like, what do you do to actually make sure that the Chinese trickles down?
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  Well, I'm trying to do a new, mentorship program right now for leadership development.
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  Coaches to teach them I've got a framework I put together this year to teach them how to ask
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  the questions down into the organization and look for those barriers.
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  Because I think the human factors is important like myself.
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  I'm I'm a consultant, not a coach, and I don't have the human factor skills.
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  But I've I've run into times a lot.
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  I wish they did have it.
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  So I think if I could take somebody who had strong new doctor schools, I could teach them
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  to go down in the organization and look for those barriers.
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  Interesting.
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  Interesting.
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  So if someone wanted to get, like, three books where they could learn how to, you know, really
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  develop a leadership strategy that sticks.
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  You got any suggestions for us?
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  Best book I read was no nonsense manager.
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  Was written back in the 70s.
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  It shows you're an old, by Peter Slickham, but it it was really, very short chapters, and it
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  includes the general manager's printer.
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  If somebody's going into management or in management, now I think that's an excellent one
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  to look at.
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  Awesome.
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  Awesome.
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  Well, thank you, Martin.
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  It was a great insight that you've given us and thank all of you for joining me tonight.
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  Please head over to my blogs and see us your own boss.com.
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  We'll have more information about all of my guests tonight.
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  And, certainly, I want to leave you with this.
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  My mission, a small business chat is to end small business failure, but here's the deal.
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  You never lose in business either you win or you learn.
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  Good night, everybody.
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  Thank you for listening to the Small Biz chat podcast with Melinda Emerson.
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  For more resources and small business success strategies, visit succeed as your own boss.com.
• 13:58
  Subscribe to this podcast wherever you listen to podcasts and join us next Wednesday.