The Balanced Scorecard

How do you know if your business is successful? How do you measure success? The Balanced Scorecard can help.

In 1992 Robert Kaplan and David Norton wrote an article for the Harvard Business Review titled “The Balanced Scorecard – Measures that Drive Performance”. The article was the result of a year long research project into 12 companies at the leading edge of performance management.

They observed that companies easily fall into measuring either financial performance or operational performance and proposed that successful performance management had to be much more balanced across the complete business. The model they proposed – The Balanced Scorecard […]

Creating Opportunities for your Small Business

Are you waiting for your small business to get ‘lucky’? Stop waiting and start creating opportunities. Don’t get hung up on looking for ‘big’ opportunities – making the right small change can produce big results.

“Opportunity is missed by most people because it is dressed in overalls and looks like work.” – Thomas Edison

The following 10 areas are places that you can start to look today for opportunities for your small business.

10 Places to look for new opportunities.

1. Your Customers

Find opportunities through your existing customers.

  • Ask your customers what they like, what they don’t like and what else they would pay for.
  • Sell a […]

The McKinsey 7S Framework

How effectively does your business operate? Are some areas of your business pulling in different directions? The ‘McKinsey 7S Framework’ can help you to create an effective business.

In the late 1970s Thomas Peters and Robert Waterman at the Consulting firm McKinsey & Company developed what became known as the ‘McKinsey 7S Framework’.  The model was created to:

  1. Diagnose how organizations operate.
  2. Advise people on what particular elements of their organization they should change.
  3. Advise how any changes made should be aligned with one another.

The McKinsey 7S Framework

The model divides an organisation into seven areas or ‘elements’. There is no hierarchy of the elements because they […]

Porter’s Value Chain

If you want to increase your profits, Porter’s Value Chain can identify where your small business creates value.

In his book ‘Competitive Advantage’, Michael Porter proposed the Value Chain as a way of understanding that competitive advantage is not created by a business but by each of the distinct value adding activities that it performs in designing, producing, marketing, delivering and supporting a product.

The value chain is the sequence of activities that a business performs in order to create and deliver a valuable product.

The model considers each activity as having inputs, transformation processes and outputs. Resources are consumed by each activity as value […]

Your Small Business Pricing Strategy

When was the last time you reviewed your pricing strategy? You put a lot of effort into making your business successful but get your pricing wrong and you can be missing profit on every sale!

Here are 16 ways that you could be pricing your product or service.

Pricing Strategy Matrix

The pricing strategy matrix shows four pricing strategies based on the relationship between price and perceived quality.

Pricing Strategy Matrix

1. Economy pricing

Costs are kept to a minimum and price is set as low as possible because there is no difference in the products […]

What is a Business Strategy?

The phrase ‘Business Strategy’ can sound both impressive and important but it also often sounds vague and detached.

Business Strategy Defined

There is a lot of jargon that surrounds business strategy but put simply:

Business Strategy is the overall, long-term plan of an organisation to fulfil it’s purpose.

A business strategy is not the same as a business plan. A business strategy is based on a longer timescale and may incorporate multiple business plans. For example, a cleaning company may have a one year business plan for it’s domestic business and another one year plan for it’s commercial business whilst it’s 5 year business strategy […]

SMART Goals for Small Business

Are your goals helping or hurting your small business? SMART is an acronym that stands for specific, measurable, attainable, relevant and time-bound. It is a simple but useful checklist that you can use to ensure your goals are fit for purpose.

SpecificSMART Goals

General goals only produce general results.  If you want specific results then make sure your goals are well defined.

Use the following questions to help define your goals.

  • Where?
  • When?
  • Why?
  • What?
  • Who?
  • How?’

Measurable

If your goals are not measurable how will you know if they have been achieved or not. For example, ‘we will improve quality’ is […]

Your Small Business Competitive Advantage

What makes your small business different from your competitors? Why should people buy your product or service instead of another?

Porter’s Generic Strategies

In his book ‘Competitive Advantage: Creating and Sustaining Superior Performance’, Michael Porter identified three strategies for gaining a competitive advantage over your competition. These strategies are ‘Cost Leadership’, ‘Differentiation’ and ‘Focus’.  Porter further split the ‘Focus’ strategy between ‘Cost Focus’ and ‘Differentiation Focus’.

Competitive Advantage - Porter's Generic Strategies

Cost Leadership

The Cost Leadership strategy is being the producer with the lowest costs in a market where competing products are indistinguishable. […]

SWOT Analysis

What are the strengths and weaknesses of your small business? What should your business be taking advantage of and what should it be avoiding? If you can’t answer these questions then a SWOT Analysis is the place to start.

A SWOT analysis is a simple but effective tool that gives you a snapshot of how well your business is doing. It’s value is in prompting you to ask the right questions about your small business. However, as with all business models, it’s usefulness is limited by how honestly and objectively it is used. Ideally you would go through this process with […]

5 Competitive Pressures on your Small Business

Competitive forces have the power to break or make your small business almost overnight. Do you know what competitive forces your small business and it’s industry are under?

In 1979 Michael Porter identified 5 forces, or sources of pressure, that influence competition in an industry and which ‘determine the ultimate profit potential of an industry’. Not only was the model he proposed widely accepted but it is still at the centre of competitive strategy thirty years later.

Competitor Forces in Small Business

Potential Entrants

How attractive is your market or industry to potential entrants?

What […]