The idea of hiring a business consultant might strike many small business owners as a way to be billed by the hour by a walking Powerpoint presentation in a flash suit. But reseller group, Leading Edge Computers, is encouraging its members in need of hard-headed business resuscitation to take on the services of WA-based Strategic Marketing and Research (SMR).
Leading Edge has commissioned the marketing and business plan specialists to conduct market research across the LEC stores.
SMR will redo the research in 12 months time to gauge the business improvement over that time.
It is also writing a procedures manual for the LEC Group, which includes job descriptions, employee performance review materials, and a phone script for phone technical support.
The company had also been hired by a number of individual Leading Edge stores, SMR director, Samantha Reece, said.
SMR undertakes analysis of the individual business, and tailors a 16-week business plan. This can be followed by a marketing plan, which looks at pricing, position, promotions and products.
“We’ve been working with about 20 Leading Edge stores and more are coming on board,” Reece said.
Part of the services offered by SMR included interviews with the company’s staff and top 20 customers, analysis of the demographic trends and business in the local area, and mystery shopping of the business and its rivals.
“The biggest thing that needs looking at is how they structure their business,” Reece said. “A lot of small businesses have six or seven employees who all do everything. We put clearly defined roles in and put in reporting hierarchies. Some businesses have 16 staff all reporting to the CEO and it overwhelms them.”
Many businesses were operating without business planning, Reece said. This would need to be tailored to the individual business.
“We don’t have a helicopter view,” she said. “In some instances, we’ve advised businesses to consolidate. Some we’ve increased by purchasing other stores, or bringing on complimentary businesses.
“In WA we’ve had a client who kept the same sales staff and shop, and increased her revenue fivefold. She’s now relocating to a larger office and taken on two new staff.”
Overcoming the small business owner’s concern about investing in business planning was achieved by offering hard-headed advice, Reece said.
“There’s no use offering this service if you’re going to cushion it,” she said. “By the time they come to us, they’re hurting. Either their sales have been stagnating for a number of years, or their good staff are leaving.”
Set fees for the business plan and marketing plan also meant that the business owner knew how much the service would cost, Reece said.
SMR had also helped two of its Leading Edge clients receive government support for their marketing plans under the NSW Regional Development board grant scheme.
Two focal points within LEC businesses had been mystery shopping and cracking down on employee discounting, Reece said.
Adherence to a strict no discount policy was “a hard mentality to change, but we do change it.” she said. “The good thing is that all the people we’ve dealt with have addressed it and they’re on the right pathway now.”
The owner of LEC Nelson Bay, Steve Ward, said that SMR had revealed an unidentified problem with employee discounting. By mystery shopping at rival stores in the area, SMR found that the competition wasn’t discounting, but LEC staff were.
“Retravision and Harvey Norman didn’t budge,” Ward said. “Our staff were convinced that they did, so they had to match them.”
The store had since addressed the problem by clarifying its no discounting policy with sales staff, and introducing accounting software to tighten controls on pricing, he said.
Owner of Noeledge Systems, Taree and Apple Centre Macquarie, Chris Bryant, signed up with SMR for a “reality check” of his business.
In the first month of implementing SMR’s business plan, Bryant said it provided a much needed overview and structure of the business.
“It gave us an understanding of the business goals and directions,” he said. “Probably the biggest thing was the business plan — having stated goals and targets with times.”
As his own background was in technical and sales roles, Bryant said the work by SMR was supplementing his own business knowledge.
He had found SMR’s in-depth survey of his customers very helpful. They had been asked their views on potential price rises, their interest in a priority support service, and possible new product lines.
Bryant said he was now consolidating his two business sites around new focus areas, and taking on two new employees.
SMR plans to establish an east coast office within three months.