The New Southern Standard

How do you measure success for your business?

Sales? Profit?  Net income? Days sales outstanding? Meeting payroll requirements?

CPAs, financial advisors, and MBAs all use a multitude of financial numbers and ratios to bedazzled audiences about performance. If you visit any finance site it doesn’t take long for you to be swimming in ratios and numbers. In general, the ratios provide additional perspective into the performance of the firm. For small business owners, all the numbers are overkill. There are 3 main numbers to be concerned with. All 3 of these numbers should be managed properly for a single reason - To Make Money.

The 3 indicators are:

Cash flow -  Incoming and outgoing cash is the most vital element to the survival of a business. Just like in our bodies, cash flow is the air that fuels daily operation and continued growth. There needs to be a healthy supply of it for things to remain normal. However, most business who have problems due so because of cash flow reasons. They either don’t focus on or don’t realize the importance of cash until it is too late. And, by that time, the supply is slowing down. As soon as that happens, the business starts to choke and gasp, desperately looking for air.

Return on Investment (ROI) - There are several measurements for ROI, the most appropriate one depends upon your business. They all provide the same concept - a relative indication of your improvement. A relative measure is different than an absolute measure in one important way. It takes into account previous (and current) investment. For instance, if I told you that I made $1Billion last year, that would be rather impressive. That is, until I told you that I had to spend $200Billion to make that $1Billion. Suddenly, things aren’t so rosy. Use ROI to measure your improvement as compared to your investment. The rule to operate by: For every $1 I invest, I need to make more than $1 in return.

Net Profit - This number is simply (Revenue - Costs).  This number is the easiest to calculate and is often the number casually tossed around in conversation.  It is an absolute measurement of how much money you made last year.

These 3 metrics should be monitored simultaneously. Your goal as a business owner is to keep all 3 of these indicators positive, trying to increase your net profit, while increase ROI and your cash flow.

(Adapted from The Goal, What the CEO Wants You to Know)

The past few weeks have been a blur. Here are 4 articles I missed the first time around. They offer a good explanation for small business and the use of social media.

What is the Top Social Media Site Among Small Biz?

Social Media: Valuable Marketing Tools or Time Waster?

Weekly social data chart: Small-business owners

Social Media Campaign vs. Social Media Strategy

And, here are 3 others that I’ve been re-reading:

Social Media Marketing for Small Business

5 Ways Small Business Can Benefit From Social Media/Networking Sites

Social Media for Small Business

More good news for the Gulf Coast.

Northrop Grumman was awarded a $1.16B contract over several other companies, including Boeing. Northrop Grumman has an office in Mississippi.

Full Story on Al.com :

Northrop Grumman wins $1.16 billion deal to build drones for Navy

In the software world, most new ideas are built on unknowns.

Will this work? How long will it take? Can we do this? What about this?

During the development of the software engineering discipline, an idea slowly formed - just try it. Don’t worry about being perfect. Don’t worry if it doesn’t work all the time. Sometimes, it doesn’t matter if it doesn’t work at all. Let’s just try it. That initial idea was called a prototype. After the prototype is complete, we re-evaluate the situation based on the experience we just learned.

The concept of a prototype is useful for businesses starting a social media program. Create a small, simple program with a few tools and push the content out. In a few months, evaluate the program and re-consider your goals. What did you learn? What where the surprises? Based on this experience, can you move forward?

What would a social media prototype program look like? The details would depend on the company, but a minimal configuration would include a blog, video, and audio podcast. The authors of the content would start developing and releasing the content to a small audience. The audience could be internal stakeholders, a cross-section of employees, a select group of customers, or just the boss. Content could be made private or public as necessary. After a few months, everyone has had the chance to interact and provide their feedback on the project.

The next step is to evaluate and then decide if the activities are worth moving forward.

Prototype programs are useful for several reasons:

- It is possible to investigate and explore separate types of media before launching a full program

- The prototype program is only a trial and a model, not the final version. It encourages feedback, cooperation, and communication

- The program tests for feasibility. Lengthy discussions concerning design, layout, and interactivity are postponed

- Integrating the new program into the existing responsibilities and operations of the business are key measurements

- Everyone involved can evaluate the level of effort required versus the outcome

A good program will last from 90 to 120 days, including regular review from inside the organization. If approved, you have 2 choices, either build on the existing content you have, or start over with the experience you’ve just gained. Either way, you are moving forward with a set of learned experiences.

Which, in business, is worth much more than money.

Over the weekend, I had a discussion concerning the motivation for a company to blog.

The inquirer was genuinely interested in the topic, but she had been given some very strong arguments from another company. She pointed me to the website (which I’m not going to link to) and the comments were borderline inflammatory. Strong emotional statements and severe jumps in logic were used to deter companies from the practice of blogging. As it turns out, the website sold web development services and wanted companies to not start blogging, but hire them to build the site instead.

I am extending the site the benefit of the doubt. I hope they truly believe the things written on the page, however misguided. I extend them this benefit because the alternative is a far worse scenario. The alternative explanation is that they are fully aware of the rhetorical devices and faulty logic being used to convince customers.

Here are a few of the points that were made:

(1) Blogging is only for news sites.

Blogging is a tool employed by news sites. That fact has no relevance on the usefulness of a blog for your business anymore than the fact that a sociopath who uses email makes email inherently bad. Blogs are a method to extend information to your customers, both existing and future ones. The information does not need to be news, in the traditional sense. It could be information relating to events, product enhancements, changes in policy, customer success, or new announcements. You could even use a blog to answer customer inquiries for a larger audience.

(2) The date stamp on blog posts is detrimental to a blog when compared to a traditional webpages.

The search algorithm used by search engines relies on many parameters, date is only one. On many blogs, the data stamp can be removed or modified, if that is an issue.

(3) There is a never-ending cycle of updating your blog.

Yes, but this is by design. It is a communication tool, not a billboard. There is a change occurring in the buyer/seller relationship. Buyers are able to stay in direct contact with their favorite companies. Blogging is one tool to facilitate this. In the same way that your team has recurring interactions with repeat customers, a blog allows you to have recurring interactions with all of your customers.

As a company starts to investigate blogging, what are the initial steps?

(A) Define your goals for blogging.

(B) Have a trial run to get a feel for the effort.

(C) Improve upon the process as you become more proficient.

I don’t talk about offline campaigns often, but for some demographics, they are very important. Data from Mattel, the maker of Barbie Doll, illustrates this point. (Original Source: Matt Dickman )

From Mattel:

• Just 39% of moms feel websites are safe and secure
• Just 38% use the tools to make the web experience safer
• 78% of moms are influenced by their offline trust in brands in their online interactions.

This is very interesting when put into the context of the web. Look at the difference between the 1st stat and the 3rd stat. If it weren’t for the offline brand, you would have less than half of your visitors feeling safe at your site. Very eye opening.

Person Matt Dickman

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With consumers having direct contact with companies, you would expect that the role of the recruiter would be diminished. But, instead of a reduction, there has been a huge demand for recruiters.

What is the recruiters biggest job? Find the perfect fit. 

It’s no longer acceptable to find a candidate that fits most of the requirements, you need to find one that fits all of them.

Headhunters, I’d use techniques from SEO (search engine optimization) and social networking to accumulate a pool of candidates.

(A) Optimize your website for keywords related to your field. Consider the search terms that a candidate would type into a search engine. If done properly, you should be high in the list for the keywords in your industry. Remember, the narrower your search terms, the higher quality the results. (That is not a very intuitive concept.)

(2) Visit, participate, and interact with the best blogs in your niche. As the readers see you interacting, you’ll gain street credibility in the field.

(3) Use the big social networking sites - Facebook and Linkedin.com - to create a profile for yourself and make it easy for people to connect to you. Put a link to your profiles on your website and in your email signature.

(4) Create a Group on the social networking sites - In addition to your profile, create a special group for your niche or your firm. Start collecting members. After a little effort, the members will start to pile up and you’ll have a huge collection of candidates for your next search

Take time each and every day to find new candidates. Continuous effort is a core tenet of marketing. A candidate you find today might not be placed until next year. But, if you wait until next year, you might never find them.

Companies love a good PR person. Consumers hate the bad ones.

At some point in the growth of a company, they decide they need someone to help manage their public communication and image. Without fail, they put someone on the payroll to run out and talk about the company. And, in general, it works. The more people are talking, the higher the awareness, and the higher the sales. But the difference between the best and the worst PR person is the difference between catching a fish and buying fish in a can. One is exciting, interactive, and has a great story; the other is wet, cold, and a bit steely.

What explains the gap?

The best PR people keep both the consumer and the producer in mind.

The advent of email was a boon for PR folks. Email gave the good PR practitioners a great tool. They could reach out to the relevant people all over the world. Then someone realized they had a million people to email.

Not in the same time zone? No worries, I’ll send an email and follow around later.

Not on the same continent? Who cares. I’ll send an email.

On the phone right now? That’s okay, I’ll send an email.

Email soon became annoying and frustrating. Today, there are new tools to help the PR industry. Here’s 3 tools that the good PR folks are using:

- Use the Social Media Release - A new type of release format is being used to great effect - The Social Media News Release (pdf version). Start using it.

- Find an advocate - Someone in the blogosphere is talking about your client’s company. And, they are influencing other people. Find these people and start listening to them.

- Engage the customers directly - The conversation is moving directly to the consumer. Create an environment with a blog, wiki, or forum, to communicate and listen to your customer’s issues. You (your client) will receive invaluable information regarding the product, the marketing, and customer support.

In addition to those tools, there is a new trend that PR folks should pick up on: Reputation Management and Conversation Monitoring. There are paid services that help you find and track the conversations about your company. Here are some free alternatives to get started.

- Keep an RSS feed of the major industry blogs and news centers that cover your industry. Each day you should review the feeds for the company/product news

- Setup a Google Alert (or similar service) to send you an update when your company or product is mentioned. You will have several overlapping results with your RSS feed, but this still a good tool.

- Do a Twitter search each day on your product and brand
These 3 tools will give you a good understanding of the conversation that is happening on the web about your clients.

Continuing the thought of this post: Change in an organization - 3 Levels

When undergoing change or implementing a new process, there is a tendency to superimpose the old methods on top of the new channel. As you start to build audiences and a channel, you’ll need to modify your old processes to fit this new model.

Here are some examples:

- Taking a press release and then sending it to every bloggers you can find- Sending unsolicited emails asking for endorsements or link trading

- Having your design team take your latest print ad and put it on the front page of your website
Building an audience and a community is going to take a change in mindset. Taking old methods and re-applying them not only won’t work, it is likely to backfire.

Education Week recently put out some results from a survey across the U.S. evaluating the use of technology in education (K-12).Here’s the post: Technology Counts: Detailed State Reeports

The charts shows the grade of each state and their use of technology in the field of education. West Virginia hit a home run with a score of 95. However, the 2nd place prize went to South Dakota with a 92. Georgia came in 3rd with a 91.

I did some additional analysis and discovered some interesting results:

Average (mean) for U.S. score : 77 (C+)

Average for 12 Southern States : 81 (B-)

5 Southern states in the Top Ten of the list - Georgia(#3), Virgina(#4), Kentucky(#5), Florida(#7), Louisiana(#9)

–

Here are some stats for the entire U.S.

Average (mean) for the U.S. - 77

Median - 76

Mode - 77

(Sidebar: The median is the middle number and the mode is the most frequently occurring value)

The U.S. had an average score of C+. As one of the leading nations of the world, it seems we can do a little better.  With the role of educators being critical to the future of the U.S., there needs to be an emphasis on making their job easier. Technology is a great way to augment educators and their craft.