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Category Archives: Business

Most Creative Idea from Marketing

Creative Idea from MarketingYou may have the quick item on the planet, however what’s the point on the off chance that you can’t discover the business sector for it? Without a business sector, an item is comparable to dead. Each little business needs to take part in forceful advertising, in the event that it expects to achieve its best potential. Most credulous business people trust that showcasing takes a great deal of cash and it is just implied of giant business associations. No! Do you truly think Facebook and YouTube utilized any incredible showcasing procedures, to make a specialty in the virtual business sector?

It is difficult to come up with creative ideas, which is why we are here to help you. These ideas will work the best for small business firms, if they are used with a hint of intelligence. So, let’s see what you can do, to make your business grow faster.

Creative Ideas for Marketing

Small Business Marketing Ideas

Small business marketing ideas focus on tapping the local market, before we take a long leap. Small businesses like catering firms, wedding planning firm, a designer boutique, restaurants and basically the ones that operate at small levels, find hard to bring on some attention.

First to hook on to social networking site, it’s free and it works wonders. Make a page for yourself on the most popular social networking site, send out invites, add all your friends and keep updating your status messages in tandem with the events at your firm. This attracts a lot of attention. Next idea is, to get press releases published in the local newspaper. This will probably cost you a free lunch or dinner for the journalist, a little goodwill and the best foot forward. It’s all worth the effort! Give away awards such as, customer of the month, and advertise this in various places. Make a blog and update it every week, join the clubs in the city.

Real Estate Marketing Ideas

Once again Internet marketing comes to the rescue of your abandoned real estate business. Real estate marketing ideas have to look reliable and trustworthy. Classified advertisements, catalogs, flyers, special reports, E-newsletters, E-books, Internet marketing, radio ads, yellow pages, press releases, sponsor an advertisement, podcasts, business cards and public relations are some of the real estate marketing ideas. Creating t-shirts, pens, calendars, organizers and other stationery items for your employees and valuable customers works very well too. Sending seasonal greeting cards and sending wishes on birthdays and anniversaries are also some PR ideas, which can win you markets. Creative marketing ideas for real estate, should be implemented with tenacity, since it takes a while for people to notice such a business.

Apartment Marketing Ideas
As a novice builder you may be looking for apartment marketing ideas to get some lucrative business, this season. Thus, gaining an insight into real estate marketing, is the need of the hour.

You can promote your projects through the print media, radio advertisements, banners and huge balloons. If you are looking out for tenants for your apartment, then getting in touch with the local coffee shops, shopping centers, colleges, recreation centers, parks and putting up your advertisement there can get you some great offers. Creating an interactive website, making unique offers, highlighting the USPs, giving the prospective customers a look around the place and promoting your apartment through reputed real estate agents are some more creative ideas for marketing your apartments.

If these ideas are used intelligently and timed well, they can reap remunerative results. These were some of the creative ideas for marketing, which I hope, brings you the fortune and fame, that you’ve dreamed of. Good luck!
Read more at Buzzle:

Comparing Marketing and Advertising

Marketing is identified with giving great administration and quality items to clients. Then again, we publicize our items to build their nature. Promotions are imprinted in daily papers, bulletins, magazines and are distributed on the Internet, which has ended up one of the best diverts for item publicizing in this current age. TV stations are likewise much looked for after, for publicizing items.

Also, marketing is different from selling. Selling just involves exchange of goods for cash. On the other hand, marketing ensures maximum customer satisfaction and client retention. Marketing helps companies in building a brand, and advertising alone cannot help achieve that. Branding makes a product something more than just a mere commodity. This is reflected from the names of products who have an established brand.

Marketing is a long-term process, compared to advertising. If there is no product ready, what will the companies advertise for? The process of marketing begins from the idea of the product itself. So, advertising can be called the last or the final step in a marketing process.

Marketing is a never-ending process. It is a cycle which keeps repeating itself till the company is fully operational. This means that marketing involves reviewing the performance of the products in terms of sales, analyzing faults, and technical errors in products, appointing committees of efficient managers to deal with the shortcomings, overcoming them, and maintaining the market share of the company.

Advertising may or may not be a continuous process. We often see that companies advertise on a large-scale while penetrating into the markets initially. It may happen in the future that the company might not require advertisements to sell its products as the word of mouth marketing, reviews and reports of the products would be so strong and positive, that they will themselves drive the growth of the company. Of course, to reach this stage, it will take a lot of time and efforts on the part of the senior management and lower level employees.

Advertising is something which helps a company connect with its customers. It also includes creating a great psychological impact on the customers by explaining them how the product is superior and more useful than products of rival firms. So we conclude that both these functions are equally important and useful.

About Intensive Distribution

At the point when an company or business makes an item, it receives different strategies and procedures to make the item effectively accessible to the shopper. One such promoting strategy is conveyance. Without a well-laid circulation arrange, no item or administration achieves the craved client. To make the item accessible to the intended interest group, organizations use dispersion channels. While selecting the right circulation channel, advertisers use conveyance procedures, which are intensely impacted by the structure of the business sector and the organization’s assets.

There are three main types of distribution strategies―intensive, selective, and exclusive strategies. The paragraphs below will explain the characteristics of the intensive distribution strategy along with its pros and cons.

What is Intensive Distribution?
Intensive distribution strategy concentrates on making the product available everywhere, at any time.
The company employs as many market outlets as possible to sell its products.
It uses all the distribution channels available and covers a majority of the market.
The products sold are generally used on a daily basis, and those which do not require an extensive brand awareness.
The product is marketed in such a way that consumers are likely to encounter the product at every possible place. They are likely to find the product at the supermarket, gas station, pharmacy, etc.
The intention is to make the product available in abundance, distribute the product over a vast geographical area in many retail locations, and make sure that consumers are never deprived of the product.
The image that such products have are ‘easily available, not elusive’. To employ an intensive strategy or not largely depends on the type of product, resources, customer demand, use, and marketing funds.
This strategy has certain pros and cons, depending on which the manufacturer decides if he wants to pursue this strategy or not.


Product Awareness
Since the products are available everywhere (practically), consumers are aware of the same.
They know the product well enough and trust the company (depending on the marketing tactics and success of the product, of course).
The main aim of the manufacturer is to improve the recognition of the product in the market.
The product gains even more popularity through commercials, newspaper ads, and word-of-mouth publicity.

Increased Sales and Earnings
FMCGs and similar products are frequently used; therefore they are produced in a huge amount.
The products are distributed via many retail outlets, and since they are regularly used, they are sold rather quickly too. Thus, making sufficient money.
You may have experienced this yourself―you may have gone to the supermarket to buy something and found that it is out of stock. The same product may be available at another discount store or the gas station. Thus, ultimately, the company benefits through the high availability of goods.

Marketing Efficiency
Intensive distribution helps increase marketing efficiency.
As a manufacturer, you are aware of how much and where the product is being used, you know exactly how to change your marketing technique to make a profit.
You may have seen commercials where a toothpaste brand offers 25% extra at the same price. Or, perhaps a free product is offered on the purchase of another product, etc.
When you know the demand for your product, you can devise ways to control the marketing campaign.

Impulsive Purchase
Impulsive purchase may act as a double-edged sword.
The fact is, since goods that use impulsive strategy are used regularly, the public does not give a lot of thought to what is being purchased and why.
Most of the shopping is impulsive. If they do not like one brand, they will easily switch to the other.
With efficient advertising, products may gain the customers’ loyalty. More often than not, the same products are used by the customers; in general, the product is so easily available that they may try a new brand for a change, but prefer buying the old one and stick to their preferences.

Huge Customer Recognition
Frequently-used and readily-available products gain widespread consumer attention.
After all, this is what the objective of intensive distribution strategy is―to make the product easily available such that the consumer encounters the name wherever he goes.
Over a period, the product becomes an important part of the consumer’s life, and irrespective of whether he uses a brand or not, billboards and print ads help make brand recall of the product.


Distribution Expenses
Despite the fact that the huge number of products are likely to result in huge revenue, manufacturers face the problem of varying sales.
The sale of goods changes as per the retail outlets―some outlets may sell a lot, while some may have a comparatively lesser sale.
When an outlet has lesser than expected sales, some products may remain unsold; however, the cost of production and distribution will not change.
Thus, the company will have to put up with the distribution costs to multiple locations despite low sales, resulting in a loss of capital.

Difficulty in Managing Retailers
The number of retail locations is spread over a large area, and sometimes, it becomes difficult to manage such a huge number of retail outlets.
There are times when the manufacturer may not even be aware of some retail outlets that may be located in far-off areas, perhaps in the outskirts or suburbs.

Dependence on the Middleman
Intensive distribution follows all the distribution channels―producer-consumer, producer-wholesaler-consumer, and producer-wholesaler-retailer-consumer.
This strategy uses so many retailers that the use of an agent/go-between becomes inevitable.
Distribution to the retailer is handled by the agent, and in such a scenario, the firm has to trust the middleman, which could be a little risky in certain situations.

Low Price Products
FMCG is the best example of low price and high volume of goods.
These low price products have a low-margin, and whatever revenue is earned is the money that is left after all the expenses are subtracted.
These goods require a fast turnover to make profit and benefit the company.

Most Effective Marketing Strategies

Associations invest such a large amount of their energy, exertion and cash on thinking of them, the answer is entirely basic. The point of any business is to create benefits, and marketing strategies do precisely that they produce more business and income. They are contrived not just concerning offering and advancing an item, additionally about the sort of client administration that the associations will give. The following is a rundown of the absolute most fruitful strategies, which organizations have been actualizing in today’s cutting edge, focused business situation, to procure incomes and to keep the opposition under control.

Effective Marketing Strategies

Build Relationships

People are very important in business, whether they are customers, suppliers, or employees of the organization.
It is necessary to form relationships with one’s customers so that they come again to make repeat purchases.
Relationships need to be built with employees as well so that the organization has a positive word of mouth in the market.

Differentiate from Competition

One of the most successful of marketing techniques is to create your own identity, which is totally different from the rest of the competitors.
A good way to do that is to stay ahead of the competition by offering innovative, technologically-advanced products.
For this, a business’ market research should be very strong, so that change is anticipated in advance and action taken accordingly.

Create Advertising Campaign

The advertising campaign should be such that it highlights all the advantages and strengths that a company’s product and services have over the one’s offered by competition.
The unique selling point, also known as USP of the business, can be something like an excellent after sales service or a guarantee period, which is much longer than what is offered by competition.
This should be creatively stressed upon in the advertising campaigns.

Offer New Products and Schemes

This is one of the most effective and commonly-used tactic by many businesses today – new products as well as new schemes are offered to customers from time to time.
When a business introduces new products in the market, its customer base increases as new customers purchase this product.

At the same time, when old customers see some new innovative features in the latest product, they make further purchases too.

This increases the sales volume as well as revenue for the business.
Another way to increase sales, is to offer some new schemes during the festival and holiday seasons, such as one product at fifty percent discount on another one, especially if the business has some unsold stock of goods lying beforehand.

Implementation of the Strategies

The strategy that is set should be very realistic and measurable. It should also be applicable for a very long time.
For proper strategy implementation, measurable goals should be set.

Goals can be defined in monetary terms, such as doubling the sales revenue in six months.
Once the goals are set, a strategy that sets the business apart from competition should be devised and implemented at the right time in the market.

Proper formulation as well as appropriate implementation of strategies is equally important for them to be truly successful. This however does not end here. Post their implementation, measuring how successful they have been in generating revenue and sales, helps in the formulation of strategies for the next year.

Find out The Keywords for Small Business Marketing

Most entrepreneurs that I have run over in little business showcasing don’t comprehend the significance of watchwords. Why would it be a good idea for them to? They are normal individuals who go to work and get on with their business, leaving the running of the site to another person. In any case, overlooking finding the privilege watchwords for your business site is costing you cash. I will quickly clarify why.

When you have your site up and running, set up even, you have to ask yourself where does it appear in the web crawlers? Actually you have to know where it appears in the web indexes. In the event that you don’t you are squandering a profitable resource and overlooking the main issue of having a site. You require a site that works for you and brings you more clients, customers and benefit.

It is all very well having your business show up for your company or domain name for the people that know it. But what about the people looking for your services that don’t know you by name? What about them? They might be looking for a dentist, a builder, an aromatherapist or where to buy organic vegetables. Will your website be the first one they find? And if not, what will they do?

Let me tell you what these people will do. They will click onto the first website that matches their search term and take their business elsewhere, that’s what they will do. Do you get my point?

The answer to this problem is relatively simple. It is by finding the right keywords that relate to your business. The terms that everyday people actually type into their search boxes. Then the trick is to get those keywords up onto the top of Google. This is done with articles, press releases, videos, social marketing, forum posting and a whole lot more and with a link from each pointing towards your website.

Quite obviously, this is easier said than done. This is where your small business marketing expert comes in useful. What these local internet marketing people are good at is researching and finding the right keywords for your business. Those keywords I mentioned, that people use to find your business, your goods and your services.

The great thing is that all this activity will give your website far more visibility than it had before. You will be where you need to be, on the first page, on top of the search engines. Now you will have a far better chance of those people looking for you, clicking onto your website and becoming clients and customers of yours. Do you now see how important small business marketing and finding the right keyword is to your business?

Is Conversation a Modern Marketing?

With the approach of social media, promoting has been changed until the end of time. Presently, clients don’t simply latently devour your showcasing messages, they are out there effectively making messages of their own. Facebook, Twitter, even places like Yelp and Angieslist, are brimming with client surveys of items and administrations that individuals love (and loathe). Organizations can no more stand to disregard the opposite side of this new showcasing discussion.

Being active on social media is only the first step to making conversation marketing work for you. Many businesses make the mistake of thinking that they are invited to participate in every conversation out there, but the truth is that for the most part, businesses aren’t welcome in any conversation online, even the ones the business starts!

This is because most businesses are using social media as simply another platform to broadcast their same-old “buy this now” marketing message. Effective Conversation Marketing, however, requires a different approach to customer communication and a softer touch to marketing in general.

Much like the advice your mother gave you when you were a struggling teenager going out on dates for the first time, a good conversationalist listens more than talks. And this is what businesses must do in the social media space — listen more than talk.

When a business really listens to what is being said — about their products, their company, and the problems that they solve with their products and services — then it becomes easy to know how to participate in the ongoing conversations in a meaningful way.:

  • Offer tips and help that isn’t self-promotion.
  • Publish free content online that helps your potential clients live a better life.
  • Simply being of service in a way that puts your clients ahead of your bottom line.

For some businesses, the idea of Conversation Marketing isn’t new. Nordstrom, for example, has employedconversation marketing principles from its inception.

Nordstrom employees are tasked with the job of ensuring that Nordstrom shoppers ALWAYS find what they are looking for. For most retailers, this responsibility ends at the door to their store. But not at Nordstrom. If a customer is looking for something that Nordstrom doesn’t carry, but that item IS carried by another retailer in the same mall, the Nordstrom employee will accompany the customer to that other store AND assist them in locating what they are looking for.

This attitude of serving “focusing on catering to customers’ needs, individually” has been a successful one: over 100 years in business and still going strong.

Conversation marketing is about learning to listen, engage, and respond to your customers in a deeper, more meaningful way. The businesses that will be successful in the next 100 years will the be the ones who embrace this reality and learn to actively participate in the new Conversation Marketing.

Your Own Local Business Marketing Company, How to Start It?

Most people who fiddle around online know significantly more than they might suspect they do, and by and large, significantly more than most neighborhood entrepreneurs.

For example, do you know how to set up a site? A wordpress blog?

In the event that you do then you could be well on your approach to beginning your own particular neighborhood business promoting organization.

More than half of neighborhood organizations don’t have a site. Furthermore, of the ones who do, most are not fulfilled by what they have. These realities give a colossal chance to you to begin your own particular nearby business advertising organization helping neighborhood organizations develop.

Let’s face it. Businesses are always looking for more customers and in this economy, that is especially true.

Setting up WordPress blogs is a perfect way to get a business online, and with all the themes and plugins that are available (both free and paid), you can design virtually any website that a local business desires and charge them a fee for designing and setting it up. You can also charge a monthly recurring fee for web hosting.

But just setting up a website for a local business is not enough. You want to get traffic to that website.

Have you ever heard or Search Engine Optimization (SEO)?

It’s a fancy term that basically means that when someone enters a search into one of the search engines, you want your website to show up in the search results on Page 1 if possible. For instance, if you are setting up a website for a dog training business, then when someone types in “dog training”, you want your website prominently displayed when the results are returned. Being on Page 1 virtually guarantees traffic to your web site.

SEO isn’t the easiest skill to learn; however, if you are marketing to local businesses it becomes a lot easier because the search terms you are trying to rank for are more specific. Let’s take that dog training example again. If you happen to be working with a business in Houston, Texas then you could easily rank in the search engines for a term like “Houston dog training” or “dog training in Houston”. Because you are targeting a business in a certain city and state, you can become an SEO expert getting websites easily ranked on Page 1 of the search engines. And trust me, most business owners know nothing about this, but love it when you can show their website highly ranked, and will pay for it!

Another valuable service you can provide with your local business marketing company is getting local businesses verified in Google Places. If you haven’t noticed what Google has been doing lately, then pay attention. They are definitely “going local” as they have even modified their search algorithms in the last year to favor local businesses in their search results. And one of the services they have added is called Google Places. This allows a business to verify that they are an actual business with a physical address and gets them listed prominently in the search engine. There are other factors as well that lead to a high ranking within Google Places, such as Reviews and Notations, but that’s the basic idea behind it. There are local marketing companies charging local business owners hundreds of dollars for this service so it’s definitely something you would want to provide.

Providing phone leads is another service you will want to offer your clients. You can work out a deal with the business owner so that they pay you a fee for every verified phone lead you send them. You could negotiate the criteria for the calls such as length of the call, time of day, voice mail calls, etc. The calls are tracked via your own unique phone number that is then forwarded to the business phone number.

Your marketing efforts would be on advertising your phone number so that calls would be generated. You can provide detailed reports of all leads generated each month, as well as invoices for the business. Business owners will gladly pay for leads because the lifetime value of a lead is worth so much more. For instance, think of a Dentist. How much do you think the lifetime value of a lead would be for them? If the lead becomes a client for the dentist, it’s likely they will stay with the dentist for a number of years. And they might have other family members who will also go to the same dentist. One client for a dentist could turn into thousands of dollars in revenue. So the dentist would gladly pay $50, $75, or maybe even $100 per phone lead.

The last service you should provide with your local business marketing company, that I believe will become increasingly popular, is called Mobile Text Messaging. I have a client right now that is a local restaurant. When their customers text “takeout” to a short code using their smartphone they are returned a link that when clicked takes them to the restaurant’s phone number as well as their full menu. Customers can review the menu then simply tap the phone call to call the restaurant to place an order. Once the customer does this their mobile number is captured which means the restaurant can then send future texts to their customers to inform them of any special events coming up, or to offer a discount or coupon for a future promotion. With smartphones on the increase this will be a growing way for businesses to advertise and grow their customer base. And you can charge business owners for providing this service.

We have mentioned several services that you, as a local business marketing company, can provide local business owners, not only in your own back yard, but anywhere. The truth is that local business owners are busy running their businesses. They don’t have time to learn the things we have discussed.

Learn to Market Your Small Business

Market Your Small BusinessOn the off chance that you’ve ever perused The E-Myth Revisited by Michael Gerber, you know the fatigued state numerous little entrepreneurs, business visionaries and new businesses wind up in. Whenever bookkeeping, improvement, item creation, offering and administration are all on your particular plate it is hard to try and begin contemplating anything other than the outright rudiments.

Maybe you attempt to make a logo with some clasp workmanship, taking pictures wrongfully off a site or a web crawlers’ picture look. One organization I met had stolen a picture that truly still had the watermark of the stock photograph organization it had a place with.

In case you’re wondering, that’s a bad idea. Stealing images, even images that don’t expressly say they’re copyrighted, is illegal and if you’re sued it can cost you up to hundreds of thousands of dollars.

That’s a scary thought when you’re just in the infant stage of your company and you’re trying to come up with the basics of a simple marketing plan.

There is an alternative. It will take about a week of concentrated effort but that week will get you a long way towards where you want your company to be. Simply hobbling along with little to no marketing materials is not a good way to build your business.

The first and most important thing to do is sit down with someone who knows nothing about your company, possibly several people. Have some way of recording their questions about the company. Listen to what they would like to see as well as what they think is important. Take all this information you just spoke and write it all up.

The next step will be to organize that large mass of information into something that makes sense. Product details should all be in one place, company policies in another and so on. With all that information you can easily copy and paste into brochures, a website and emailers. You can visit the text later for mailer ideas and reword and update things as products change.

Knowing what you do, you can spend the rest of the week creating a logo that matches your company’s mission, taking photos to make a marketing library and building a mailer or e-mailer to send to prospective clients.

Demystifying small business marketing and simplifying the design process isn’t impossible. Any one can do it and even if you decide to outsource such things to other skilled professionals, you should be empowered with some of the basic principles so you can understand what they’re doing!

Essential Tips become an Entrepreneur

become an EntrepreneurWith the financial retreat as yet gazing us in the face, cutbacks turning into a stark reality and openings for work contracting by the day, numerous individuals are thinking about transforming into business visionaries, as opposed to searching for employments in different multinationals. For turning into a business person, there are two vital things that are required, i.e. capital and the right business thought. Taking a gander at the state that most world economies and organizations are in today, it is extremely vital to think of an imaginative business thought, which will be to some degree retreat confirmation and will likewise give predictable returns. Proposed beneath are some of such “more secure” business thoughts.

Entrepreneur Ideas for All

Caterer : Another small business idea which requires a minuscule investment is to offer one’s food catering services. If you are someone who loves to cook and bake, you can start your own catering business, by supplying food for parties, festivals, get together, dinners and even office meetings.

Consultant : One of the best business ideas for both men and women is to become a consultant. This is however possible only if you are proficient in some skills such as marketing, advertising, public relations, etc. Also, for being a consultant, one requires lots of contacts and networking skills. So keep these prerequisites of the job in mind before taking up this venture.

Secretary : Many small businesses need secretarial services, yet they do not have the required funds to hire a professional through an agency. If you have computer skills, and the necessary equipment such as a computer and a printer, you can readily take up such assignments and work from home itself. You would need good communication and organizational skills to become successful in such a business.

Writer : If you have a command over the English language and love to read and write, you can consider becoming a freelance writer for various online publications, websites and local dailies. You may also become a blogger, which by the way has become a multimillion business nowadays.

Tutor : If you love children and are master in any of the subjects taught at school, then you may contact a school or a home school group at the local level to check if they have a requirement for tutors. Tutoring is in fact one of the best businesses for women, considering that it leaves enough time for them to manage both family and work simultaneously. You can consider starting your own tuition classes from home. If you are good at painting, craft-making, singing or dancing, you can take hobby classes for the same as well.

Event Planner
Event planning is one business which anyone can start, irrespective of their qualifications. Whether it is weddings, office meetings or seminars, there is always a need for event planners who can ensure that they are organized effectively and efficiently. To become a successful event planner, one needs to have good networking, communication and organizational skills. Ability to pay attention to detail and handle any crisis which may arise, are the other two main requirements of this business.

Ideas for College Students

Cleaner : Most students do not keep their rooms or dorms clean. So a good way to earn money is to start a business which provides dorm cleaning services to other students. A student can offer services such as cleaning and organizing the room, taking out trash, making the bed and re-stocking the refrigerator. Or alternately, students can offer their cleaning services to households and provide services like carpet and window cleaning.

eBay Seller : Since majority of college students are Internet savvy these days, a useful idea for them would be to become an eBay seller. They can purchase cheap goods from the Internet, garage sales or second hand shops, pack them well and then sell on the Internet with a profit.

Baby/Pet Sitter : Another innovative business idea for college students is to become a baby or a pet sitter. There is a lot of scope to earn in this profession considering these days both the husband and wife work long hours.

These are some business ideas which anybody can make use of. These days, it’s not just adults, but little children too who like to start earning money as early as possible. Some good business ideas for kids are to offer their gardening services, start their own toy rental library, and to provide dog washing services. In the end, it can be said that anyone can become an entrepreneur, whether young or old, male or female, provided they have the skills, confidence and attitude to carry on a business. A sure shot successful recipe for a business is hard work, skills, self-assurance and the ability to face any setbacks that may arise.

Embed Innovation into Family Business Strategy

Creating techniques for a family company is intense work. Executing the techniques is significantly harder. So by what means can a privately-run company be relied upon to take wanting to another level? By imbuing advancement into technique!

On the off chance that yours is one of only a handful few family firms that makes a key marketable strategy, including a component of development into the procedure will eventually be all the more empowering, in this manner expanding the likelihood of more important arrangements that have genuine effect on the privately-run company. Inventive methodologies can likewise be all the more moving to execute. Imbuing advancement into the key arranging procedure resemble the wind in the face of your good faith, lifting and supporting the technique improvement procedure to new statures.

Finding the Right Innovation for Your Business

Before diving into the question of how to infuse innovation into strategy, it is vital to understand the current economic health position of your family business. Determining the growth position will be a key determinant of the type of innovation thinking appropriate to aid in achieving the strategic initiatives you have developed.

On a classic bell curve of profitable growth, the High Growth outlier region indicates those family firms that are growing at double-digit rates, often times doubling every couple years. The Distressed outlier includes the few family firms struggling to make a profit and preserve the family business. The majority of family firms reside in the hump of the bell (the statistical zone of the mean and median) where they typically grow around the pace of the economy or in the single-digit range of 2 to 9 percent.

Innovation at the Extremes

Interestingly, the family firms residing in either extreme of the bell—those in distress or those in high-growth mode—are more apt to infuse innovation into their strategies. The high-growth family businesses, characterized by the need for cash to fund growth elements such as inventory and accounts receivable, often need to be innovative about how to ramp up operations to meet the high-growth demands. They find themselves trying to live up to the proverb “Make hay while the sun shines.” Innovative strategies to increase production become paramount: adding and blending a mix of more labor, more automation and more markets, both domestic and international.

For example, at a recent strategic planning session of a family business, the second-generation family leader celebrated the firm’s third consecutive year of growing more than 20 percent per year. He incentivized his leadership to “make more guesses on labor and capital needs, even if you over-hire or over-purchase capital.” A key strategic initiative emerged to develop a more flexible global production capability where they will be able to quickly shift production from North America, Asia and Latin America. In this high-growth phase, it is more important to build capacity while improving quality and delivery, all of which require more innovative approaches than a lower-growth company.

Family firms in trouble are open to trying new approaches because they know they have to change or potentially lose the business. These firms need rapid decision-making, more experimental tolerance, greater discipline on cost controls, and a shift towards compassion for the whole company, rather than individuals. If payroll reductions are required, there are adjustments that can be made for the benefit of the company without the shock of sudden layoffs. Along with moving people to part-time or temporary positions, a creative approach exercised by one family firm is called “tapping on the brakes.” It is a program that offers a steady wind-down of hours while still allowing time for outgoing employees to pass critical knowledge to others without abruptly departing.

Other firms in distress have infused creative financing into their strategies, engaging private equity firms that are more willing to take a minority ownership position. According to Warren Buffet, “A crisis is a terrible thing to waste.” These families should take advantage of their distressed situation and move from incremental changes in strategy to more radical or innovative changes since there is less to lose.

Innovation in the Midrange Family Business

The most difficult bell-curve position for family firms to embrace innovation in their strategy development is found in the large hump of the bell. Here is often found a mindset of “business as usual.” It is with this majority where the need exists to be more purposeful about looking at innovative ways to develop strategies.

While only a third of family firms are known to develop written strategic plans, those that do often stick to fairly standard approaches to the planning process: Conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis; check trends; review financials; and identify key strategic initiatives and performance indicators. What is often missing is a robust strategy development session forcing the planning team to look at things differently, suggest new approaches, think beyond best practices and try new concepts.

Some of the ways for these stable, status-quo-satisfied family firms to infuse innovation into strategy development are to:

Ask more probing, provocative questions.
Strive to develop best practices in their business or industry instead of copying what others may proclaim are current best practices.
Place a family member on an innovation team either as the leader or member of the team.
Asking the Right Questions

Before diving head-first into a planning session, develop a list of relevant questions to trigger different perspectives and encourage creative thinking about the firm’s strategy.

For instance, when one family continued to lose market share from their traditional direct sales channel, they began to ask:

Why do we continue to market our products the same way when the channels of distribution are rapidly changing?
How can we adapt to the digital world more quickly?
How can we make money or “monetize” in the digital world?
These questions led to the development of a Digitalization Task Force that included millennials working in the business and a young marketing professor to assist the family in creating a multi-pronged approach to the digital world. New service offerings for developing websites, conducting focus group research and forming a digital communication agency have already emerged from this team.

Another family presented the following questions to its strategic planning team during an off-site planning session:

Will our vision and mission help us achieve a long-term family business?
What are 10 ways we can reimagine and package our product offerings in new ways?
What are we doing to reboot our offerings and marketing for the new realities of customers buying in dramatically different ways?
How are we going to take advantage of multimedia channels?
What are we trying to do for our customers? What do our customers really want?
When it comes to customers, how is our organization shifting from a “how many” to “who” focus?
Other family firms follow questions that management gurus like former General Electric chairman Jack Welch have posed to public companies. Welch has a series of competitive questions that could help a family firm trying to break out of their status-quo mentality:

  • What does your competitive environment look like?
  • In the last three years, what have your competitors done?
  • In the same period, what have you done to them?
  • How might they attack you in the future?
  • What are your plans to leapfrog over them?
  • Making Your Own Best Practices Even Better

Meeting current best practices keeps you even with competition. Creating new best practices advances you past the prevailing conventional wisdom.

When Jimmy John Liautaud, founder of Jimmy John’s sandwich company, tried to beat Subway in the marketplace with higher quality ingredients, he learned that the consumer only placed an incremental value on the substantially higher quality meats, cheeses and other ingredients that Jimmy John’s offered. They had already achieved the industry level of best practices in quality, operations and delivery time, so how could they differentiate themselves?

After much strategic discussion with many of their family-owned franchises, Jimmy John’s decided to move past the current best practice for delivery time. This led to their “freaky fast” approach. Liautaud claims this changed everything. By upping their game in this key element to become the quickest sandwich delivery in the business, this strategy led to greater innovative thinking on improving order taking, sandwich making, delivery training and menu adjustments.

Infusing Family into the Process

When a family member is involved in the innovation process, it brings a heightened awareness to the process and forms an advantage for family businesses. A family member typically brings clout and an insider level of persuasion to effectively work through “messy” and often politically dicey development tasks, like securing funds for research and development or building a quick prototype. The presence of such innovation champions in the family leadership is essential for family businesses to grow beyond their core business. Of course, such champions require fundamental management skills to see innovation through. A good idea is almost never enough.

Matt Schad, a fourth-generation member of the family-run Nucraft Furniture Company, is a great example of an innovation champion. The business creates high-end office furniture found in some of the most prestigious law firms and government agencies in the United States. Schad worked as an attorney with a Washington, D.C. law firm before joining Nucraft, where he rose to lead new product development. Though admittedly not a designer himself, he has the family position, business savvy and law experience to maneuver new products through the organization effectively. By combining inside talent and external design support, along with his deep law-firm experience, Schad has created a steady stream of products that have driven revenue growth and won high-profile industry awards.  Schad was recently named Chief Executive Officer, partially because of his success in creating new creative offerings.

It takes multiple approaches to infuse innovation into family business strategy. Asking provocative questions, developing your own best practices and inserting family leaders are just three ways to improve the odds of incorporating creative thinking into strategy development. Adding innovation should not be considered an additional step in the strategic planning process, but rather an integral part of the process.

And as one family leader pointed out: “Innovative thinking is not only critical for advancing the family business, it’s a lot more fun!”