Susan Wilson Solovic: Hello and welcome to “SBTV.com. I’m Susan Wilson Solovic. Today, our guest is Jaynie Smith. She is the President of Smart Advantage which is a marketing and management consulting firm. Her clients include mid-size companies and fortune 500 companies and she consults with CEOs around the world. She’s a popular speaker and she’s also the author of Creating Competitive Advantage. Welcome Jaynie we appreciate your being here.
Jaynie Smith: Thank you.
Susan Wilson Solovic: Now, first of all, entrepreneurship is on the rise right now. I think everybody wants to be an entrepreneur, but what are some of the common mistakes that you see start-up businesses and early stage businesses making?
Jaynie Smith: There are a number of clearly, but one of the things is if you’re going to get into business you have to have a competitive advantage otherwise, you’re in a playing field you get into a commodity you have no margins and you can’t be healthy. So think from the get go, what’s going to differentiate my company and I said earlier it doesn’t have to be a product or a service. It can be how you deliver it. Offer better terms than someone else. Offer better payment plans just something different that’s going to make you stand up in the crowd. And the other part of that is very few companies if they start a business and they say, “Well, I do have a competitive advantage and here what’s differentiates me so I can go out there and knock them dead.
One of the flaws which leading to that is they don’t revisit it often enough. Competitive advantage is a moving target. There’s no question about it that you absolutely, positively have to have a review of this on a regular basis. That means a small business is really guilty of this. We get so internally focused. We’re looking at—somebody said it to me today, I had a presentation earlier and the CEO said to me, we’re so focus on cash, cash, cash and more cash.
Get in the business get in the bills paid, and get in the cash in that we forget to look externally. We need to constantly be looking at the customers, the changing landscape of what they need and want and the competition and how that comes together relative to how we placed ourselves.
Susan Wilson Solovic: I thought it was an interesting analogy you wrote about the army exercise where they were shooting and then explain that.
Jaynie Smith: Well, the army exercises you’re shooting it to the uncoming.
Susan Wilson Solovic: The snipers, you were talking about two snipers.
Jaynie Smith: The snipers and they sneaked it up on behind and you’re not looking. You don’t have your head doing a 180 degrees of 360, and you need to be looking 360 in this business world if you’re going to stay alive and well.
Susan Wilson Solovic: A lot of the viewers who contact us or talked to us. They say I want to start a blank business and it’s just a need to business.
Jaynie Smith: Right.
Susan Wilson Solovic: And can that be successful or?
Jaynie Smith: Sure, it can be. You know as long as you look to for ways to differentiate and my favorite example of that is JetBlue, the airline that started a few years ago on the East Coast. JetBlue started to talk about commodity, who wants to be in the airline industry. My goodness, David Neeleman that business and I had the opportunity to interview him for the book and I said, “How in the world do you get into a me too business, a commodity business, and do so well as you did in the first few years?” And he said something very interesting and I love to quote him. He said, “Well, we come up with competitive advantage just regularly and how we do this is we got the phone once a week with all our managers. Our managers have to fly the competition. If they have a business trip they don’t flu JetBlue. Once a week, we ask each other three questions, and every business from start-up, on the way up should be asking these three questions. They are; what we do better than them in the competition, what they do better than us and how can we do that better than them?
And if you’re asking yourself those questions all the time. Your focus and that’s what he did he came up with innovation after innovation in the early years and really made a good mark for his airline.
Susan Wilson Solovic: You mentioned the important word and that’s focus because so many early stage companies because they’re worried that cash, cash, cash they are wanting to be too many things to all people. Is that one of the problems that you see?
Jaynie Smith: That is a tremendous mistake. Get focus on what you can deliver as long as it’s something that the customer needs or wants. You know sometimes companies want to deliver something that has no meaning to the marketplace but make sure that that’s an alignment.
And then the other thing to follow it up is make sure all of your employees even if you have two, your two employees or 10 or 50 all of them know your competitive advantages. I go into an organization and all I have 25 employees assembled then also. What’s your number one competitive advantage? Do you want to guess how many different answers I get?
Susan Wilson Solovic: I can even imagine.
Jaynie Smith: 25.
Susan Wilson Solovic: Really?
Jaynie Smith: And what is that say to the marketplace when there’s no internal agreement, so if you have two, three or five employees make sure everybody can say the same competitive advantage quantify the same way. So that that message get out there and people understand what you’re really about.
Susan Wilson Solovic: And it needs to permeate throughout the organization.
Jaynie Smith: Throughout the organization, 100% and if it changes everybody needs to be singing from the same hymn know it at all times.
Susan Wilson Solovic: What are some of the other mistakes you see Jaynie?
Jaynie Smith: Well, one of them is in the planning process I see lots of companies—first of all, real small companies have a tendency to not do enough planning. They don’t value the strategic planning process and they should because you need a road map. You need a map on how are we going to get there.
And if you are doing a planning process you must stand a significant amount of time evaluating your competitive advantages and the competitive disadvantages because bear in mind the opportunity for operational decisions, how are we going to moved going forward, how can we price ourselves based on these advantages, how are we going to position ourselves based on the disadvantages, are these disadvantages insurmountable or can we fix them and get creative and turn them into advantages.
We need to be asking ourselves these questions all the time. And very few small companies take the time to do that. And that’s the difference between the ones that last and the ones that don’t.
Susan Wilson Solovic: They’re too often just in that survival mode just sit back and take a big, look at the big picture, but a lot of companies say to me, “Okay, I’ve done my planning, I did the strategic plan, but everything is taking longer and costing more than I expected.” Then what would you say to them?
Jaynie Smith: I would say we all want a quick fix, don’t we? You know we’re a society advance in gratification, but it is a process. And I have to say for small company, you don’t need to do a weekend retreat. When I started my small business I had a consultant come in. I spent all the day Sunday one Sunday and he helped me do my planning, my forecast. And for small business that’s okay, but I had a road map. And clearly every quarter you’re going to say, “That’s not even close to what I planned.” And it never will be close to what you planned, but it gives you a place, a target. And you would just as you go. And it’s in the adjustment that you find out what you’re doing right and what you’re wrong.
Susan Wilson Solovic: I think that’s one of the fears of small businesses have. If they write it down and they have this plan that’s written in stone or concrete somewhere, and then that’s what they have to do.
Jaynie Smith: No, it’s a very fluid, but it gives you something to shoot for. And it gives you a measurement even if your forecasts are completely wrong. By the way, mine were and most businesses are.
Susan Wilson Solovic: Absolutely.
Jaynie Smith: And they almost owe them.
Susan Wilson Solovic: You don’t have a crystal ball. You can’t predict everything perfectly.
Jaynie Smith: No, we make assumptions and we’re wrong about our assumptions, and that’s I think that’s one of the key things that comes back to a small business is, what were the assumptions we made going in? And when we see we’re wrong how do we adjust those assumptions? And it’s in the adjusting of these assumptions that gives us on to the next level, on the next level.
Susan Wilson Solovic: Anything else we should be looking for, any other mistakes we should avoid?
Jaynie Smith: We should make sure that we have competitive advantages. We know what they are all of them. I find a lot of companies don’t know them, don’t know a few of them, but not all of them. They’re varied and they’re varied in the deliverables and that’s what the book will help you find, and more importantly make sure you communicate them ad nauseum. Everywhere your customer’s sees and hears about you, there should be a competitive advantage message.
Susan Wilson Solovic: Well, Jaynie thank you very much for joining us. You’ve given us a lot to think about in terms of competitive advantage and of course you’re the author of Creating Competitive Advantage, and we appreciate your time.
Jaynie Smith: Thank you so much.
Susan Wilson Solovic: And thanks to all of you for watching us here on SBTV.com where small business is our only business.
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