Tag / small business

by Frank Maduri

Strong Bucks: The Strength of the US Dollar & The Impact on Small Businesses

The financial news outlets have run a variety of pieces on the growing strength of the U.S. dollar as compared to other foreign currency such as the Euro or the Japanese Yen, but this development is already exerting a negative impact on the small business community.

 

The stronger dollar means that the importation of American products is more expensive. This translates to “Made in the USA” products being less capable of competing with products made in China, Europe, and other emerging markets. The result has been a domino type of effect where the distributors of US made products located overseas are either placing smaller orders or seeking some type of price reduction to be able to move the inventory.

 

This scenario places the American small and medium sized business in an unenviable position of having to shave profit margin points in order to remain competitive in overseas markets. The reduction in profit margin often means that they have less money to reinvest into their business to either develop new products or new methods to produce goods as well as having less money to hire additional workers.

 

Weak Forecast

 

The news of the strengthening of the US dollar comes against the backdrop of a weak jobs report for the month of March. This forecast will look especially bleak when you consider that the majority of new jobs are created by small businesses, and they are dealing with a negative outlook on their respective profitability due to the stronger currency performance of the dollar.

I compare this situation to a negative feedback loop because it is all tied together and the consequences are serious for the small business community and the future of American manufacturing. I have read accounts of small business owners who remain committed to making their products in the USA, but they acknowledge that the currency outlook will force them to innovate and work with smaller head counts.

 

The labor outlook continues to be troubling not only for Wall Street but the Federal Reserve as well. The forecast for growth of better paying jobs as well as overall wage growth is an area of increased interest by the Fed in recent months. The majority of the American work force has not seen wages increase much, if at all, in recent years. The improvement in the economy was supposed to change that trend, but it has not.

 

The American economy went through several months of adding jobs in traditionally lower pay sectors such as retail and hospitality services. The real indication of an economy that is turning the corner is the addition of higher wage paying positions in a variety of other sectors, which would have a direct correlation to wage growth, but these metrics have been slow to develop.

 

Clogging the Engine

 

The American small business is the engine which gets the rest of the job market moving again, and I fear that the strengthening of the US dollar in the currency markets will have a negative effect on their profitability. This will directly impact their ability to hire more workers, which will have a widespread effect on the American labor participation rate.

 

The strong US dollar might be great for tourism because Americans can go and get significantly more value for their money in their European trips this spring and summer, but this will be offset by the ability of American small and medium sized businesses maintaining profitability. The economic realities of that change will have profound impact on the domestic economy through the rest of 2015.

 

(Some background information courtesy of CNBC.com and CBS Marketwatch.com)

by Frank Maduri

Best Practices in Project Management

A small business, like any other business, needs to efficiently manage the projects they are working on for their respective customer base. Please allow me to preface this article by stating that the type of project management I will be focusing upon in this article is not Information Technology (I.T.) based project management.

 

 

This article will focus on marketing and business development project management, and I will draw upon my over 14 years of professional experience in these two areas to share the best practices I have utilized in my career.

 

 

The key to effectively managing projects which develop business for your company is the ability to be nimble and flexible. The fast-paced business world changes rapidly, and your small business has to be able to adjust and adapt to this changing landscape in order to survive.

 

 

The first step – Project Entry

 

 

Every company whether it is large, medium, or a small business; each one has a system for managing their work. The entry of a project into this system is a critical first step in this process. In order to be efficient in turning out projects the entry process must be:

  1. Concise – the project synopsis must be short yet detailed and precise
  2. Action oriented – the project must clearly relate the action(s) needed
  3. Past work – the project should always reference related previous work in order to help efficiency and save precious work hours to maximize sales

 

 

In my experience, I always used the project synopsis to provide my colleagues with the most critical information. It was written as directly and clearly as possible to eliminate potential misunderstandings or ambiguity. My projects were very action oriented and clearly demonstrated the action needed and by which individuals where needed to bring the project to a successful closure.

 

 

I also made it a habit to reference past projects and past work done either for that same customer, or for a related business objective. I would refer to the prior project number and the outcome of the project to assist my colleagues in providing a baseline for their work.

 

 

Workflow Organization

 

 

I found in my experience, the best way to organize your workflow on the projects within the system was via Excel. I would set up Excel spreadsheets for pending projects, new projects, and closed projects (usually backed up 4-6 weeks) and would track the status of each project by updating the Excel sheets with new information.

 

 

Then, at points where I was juggling several projects all within tight deadlines, I would print hard copies of the projects and the Excel sheets. I would separate them in piles in the categories I listed above, and file new information by attaching it to each project. I found that this method helped me to see the whole picture more clearly by having hard copies in front of me. It has to work for you and your respective business, but this method usually helped me to not miss an important detail or deadline.

 

 

This topic encompasses so much information that I created a second part to this article. In the second part of this series on Project Management, I will share my experience with a priority system, and also provide ideas for tracking projects that require the involvement of several different members of your company.

 

 

 

Priority System – Why your business should have one

In several businesses which I have worked with in the past, a priority system was implemented to help with managing projects for business development. Some companies divided and categorized their customers as: “A”, “B”, or “C” with type “A” customers being the top priority for incoming projects. Other companies used a number system to rank their customers: 1,2,3,4. Obviously, group 1 would be the top priority customer category, and group 4 would be a low priority customer or low priority business opportunity.

 

In this system, when a project is entered, the priority for attention would go from the top accounts down to the “type B” or “type C” accounts. This enables a division of labor and resources which is clear to all those involved in your company to manage the projects in the system effectively.

 

In my experience, I had several points where I was managing projects for several top tier customer accounts, or “Type A” accounts and each project had a deadline in the same two or three day window. Those types of days are stressful and hectic, but in order to cut through the potential chaos, the priority system can still work.

 

In the case of having several top priority projects due all at once, then you must come together as a team and discuss the projects. The account manager, the project manager, the head of marketing and any other key personnel need to meet to weigh the business opportunity versus the cost of the project to your company. This is like a “sub level” to the priority system that will help to address multiple projects with tight deadlines. This type of team communication and communication with your customers can really help in those difficult days of growing pains for your small business.

 

The Weekly Report – simple yet effective

 

I have worked with a few different companies that did not have a weekly report as part of their project management function; until I arrived there and made the suggestion to implement one.

The weekly report for project management is a simple function yet a very effective component to your business operation. In setting one up, I would use a template and send the report out on Friday every week via email to all the key personnel appropriate within a given organization.

The report detailed all the projects which were scheduled to be due for completion during the following week. It listed: the project name, project number, the customer account name, the due date, current status, and action needed.

This report allowed all the key personnel, and myself to see the work we had ahead of us for the upcoming week, and allowed for any feedback or objections to be made known ahead of the project due date.

It is a simple function to implement into your business and I worked for two companies that found this report so helpful to their project management, that they implemented it across the board for their respective businesses.

 

Summing Up

In summary, the role of project management for your incoming business opportunities is very important to the health of your company. This article listed only some of the suggested ways you could improve project management within your business.

 

A small business with limited manpower will need to place an emphasis on project management best practices in order to efficiently respond to business opportunities. These tips will help to streamline your activity and help your business save time and money from wasting resources in an undefined project management environment.

 

 

 

 

by Frank Maduri

The E.P.P. and Green Products Marketing

The issue of environmental protection is one in which we all have a vested interest. The federal government and their respective agencies and entities are enormous purveyors of a huge range of products for use within their operation.

 

The Environmentally Preferable Purchasing (E.P.P.) program was started by the federal government under the umbrella of the Environmental Protection Agency (E.P.A.) to oversee the purchase of “green” products. The E.P.P. program was designed to improve the compliance of the federal government agencies with regard to the purchase of environmentally friendly products.

 

The E.P.P. program was started in 1993 with the following main functions:

  1. Find and Evaluate green products and services
  2. Identify Federal green buying requirements
  3. Calculate the cost and benefits of purchasing choices
  4. Manage the green purchasing processes

(www.epa.gov/epp)

 

The role of the E.P.P. is very important because the federal government is such a huge entity requiring a wide variety of products within its operation.

 

In fact, the Federal government is the largest purveyor of goods and services in the U.S. with spending on goods and services totaling
$350 billion per year (www.epa.gov).

 

 

The Five Guiding Principles

 

The central components of the E.P.P. program were divided into five principles to streamline the focus for the other federal government entities to consult the system when making decisions on product purchasing.

 

The 5 Guiding Principles of the E.P.P. program are:

  1. Environment + Price + Performance
  2. Pollution Prevention
  3. Life Cycle Perspective/ Multiple Attributes
  4. Comparison of Environmental Impacts
  5. Environmental Performance Information

(www.epa.gov/epp)

 

These five principals must be given consideration by the federal procurement or purchasing agent when making a decision on a product or a service. In my own experience with marketing “green” products to the federal government, I have found that all of these principals are important.

 

However, the two principals that I found to be the mitigating factors are: price = performance, and the life cycle perspective/multiple attributes principal.

 

The environmental protection of a product could be great, but if it has performance differentials that lag behind the “non-green” or standard product alternative, that is a big issue.

 

The sensitivity to a given price point is always a consideration with green products. It can have a great environmental protective quality, and it could be an efficient, high performance product as well. The price has to be in line with the other products available on the market; if the price point is too high then it is going to be problematic to sell to the federal government.

 

Furthermore, the life cycle perspective/ multiple attributes principal is a critical component to federal government purchasing decisions. In my experience, the requests from federal entities were made for information on the performance of our product throughout its life cycle.

 

The federal procurement officers wanted to see data on how the product performed in certain conditions over certain intervals of time (30 days, 60 days, 120 days etc.) and during certain weather conditions.

 

They would study or inquire as to whether the product could do multiple green functions, for instance, if the product could be used on both land and water. The products with versatility and multiple uses, or attributes, will fare better in potentially gaining a federal government sales order.

 

Executive Order 13514

 

The E.P.P. program was given further significance with the implementation of Executive Order 13514, which essentially orders federal agencies to use sustainable practices when buying products or services (www.epa.gov/epp).

 

In my own experience in the green products area, working for a distributor, this executive order changed everything when dealing with the various federal government agencies. I could sense a change in the approach of the procurement officers that they felt it was important for them to take a more comprehensive look at the green product alternatives available.

 

The cost benefit analysis was, and always will be, an important factor in the decision making process as well. The difficulty with certain green alternatives is that their price point may be higher than a standard product with no environmental benefit.

 

The reasons for this higher price level are variable but could include the sourcing of certain commodity ingredients which are made from sustainable sources. Due to limited supply those ingredients will be more expensive, thus driving up the cost of the finished green product.

 

Role of E.P.P. and small businesses

 

The role of the E.P.P. can be very helpful to small businesses which are attempting to gain a foothold within a federal government agency. Any small business that is trying to market products to the federal government has to be familiar with the Federal Acquisition Regulation (FAR) guidelines.

 

The FAR guidelines are a uniform policy for the acquisition of supplies and services by federal agencies (www.epa.gov). Two important decisions occurred which provided further credence to the E.P.P. program and FAR:

 

  • In 2007: The Secretary of Agriculture announced that procurement preference be afforded to biobased products within certain designated items (www.epa.gov/epp)
  • In 2008: The Department of Agriculture published rules designating 27 biobased products for federal preferential procurement within the following areas: personal & facility cleaning products, greases, oils, lubricants, and construction products (www.epa.gov/epp)

 

In the event, you were a small business with production and/or distribution rights to any of the above mentioned products, then your business had a good chance to make a sale with the federal government.

 

The E.P.P. program has a great section of the website called Information for Vendors which provides valuable information to businesses who are looking to market green products or services to the federal government (www.epa.gov/epp).

 

This section of the website contains critical information on how to sell green products to the federal government. The section also provides a link to U.S. Business Advisor, which lists all the information on federal agencies: contact information and current procurement opportunities.

 

The benefits for a small business to work with E.P.P. are numerous and should be a strong consideration if you are in the green products market, or if you are looking to gain entry into this very important market.

 

The E.P.P. program was introduced to increase the availability of green products into the operations of the federal government. The goal being to minimize the environmental impact of their activity and to create opportunities for small businesses to partner with the federal government to implement these new products or services.

 

I think we can all agree that the focus on bringing more sustainable products into the marketplace is a very positive development for our future. I encourage you to visit their website www.epa.gov/epp for more information.