How long is your sales funnel?

In a recent discussion with a mortgage broker, he told me that he is making a good income, but he couldn't predict his revenues more than 3 month out.  This makes it difficult for him to plan.
In questioning him further on his sources of prospects, I found that although he has a good understanding of where his prospects come from and how to nurture them, he has no process for nurturing them.  So although he knows the type of prospect he is looking for, he doesn't track what makes him successful at nurturing and turning that prospect into a customer.
This is a common issue for most small business people.  Their focus is on today and making today's transaction successful.  They have no time to focus on future prospects.  They are too busy handling today's issues.
In this specific situation, the solution is to outline what it takes to turn that prospect into a customer.  The business knows what the actions are.  The problem is that they are too busy handling today.  The solution is simple:

1. Define the actions.
2. Define how you would measure the outcomes (How do you know that the prospect has changed stages?)
3. Outsource the activities to a virtual admin (This includes the measurements).  With a few simple activities, the cost will not be high.
4. Monitor the results.

This will take some time to develop the plan.  The monitoring will take only a few minutes a week.  Every new contact needs to be classified into the stage that they are at as they come in.
This process will help you to develop and extend your capacity, your number of prospects and sales and increase the revenue stream.

When you need Information, Think Process

Every business neds information to operate effectively. Much of the information that we use to make decisions is subjective, based on what we think is happenning, or what has happenned in the past. As your business grows and develops, this changes, but our thinking about it often doesn't.

A set of studies done by Kodak described the following:

• 20% of the data that we have in our business is structured.
• 80% of the data that we have is unstructured.
• Unstructured data is growing at a rate of 36%, which means that the problem will continue to grow.

What is unstructured data? Unstructured data is data that is disconnected from our business processes. It is produced by our business processes, but may not be captured automatically nor stored in a consistent form.

What does this mean? It means that when we need this data is required, time is wasted searching for it, or recreating it or finding it. This is time wasted or decisions being made based on outdated or incorrect information. A further element of the study, showed that:

• Most Managers spend 15% of their time searching for information.
• 42% use the wrong information once per week.

Before you suggest that this is a big business problem, I have found that small businesses have the same kinds of problems. When I start to work with an organziation, I ask them what data they have in electronic form and try to analyze what's happening. Invariably, I am able to tell them something that they were unaware of. The problem is that the data is typically not 100% accurate, because it was not captured by a process that was designed for that purpose.

I often see decisions being made due to a lack of information. Attempts to collect the information often fail (except in large businesses where there are resources to do it) because staff are too busy delivering service and they must take time away from this to collect information. This seldom works very well of for very long.

The solution is to make data collection a by product of the process that you design. Most software has an assumed process built in. When you use it the way it was designed, it captures all of the data that you need and allows you to provide the information that you need to make decisions. When you only use the parts that you think you need, you lose all of the information you need for decision making, because not all of this data is captured.

The first thing you should do when you decide to buy new software, is to look at your business process (right after you define your goal and decide which process will help you deliver it). Identify how the software will help you meet your goal, including the information that you will need to make decisions or understand when you are having problems meeting your goal. Collecting the data should not be a major effort. It should be a byproduct of the process.

So when you want information about your business, think process. Design the process that will deliver not only the functionality that you are looking for, but also the information. Use the software as a tool to help you get there.

Business Analytics and Business Process

Business analytics is a fancy name for getting information about your business. Most small businesses (the size is dependent on who you talk to) will probably not want to talk about business analytics because these projects typically have a big price tag. But whether they are big projects or not isn't the issue. The issue is whether there is value in getting information about your business to allow you to better understand your customers, your costs, etc.

Most small business owners think they understand their business, and they do, to a point. What is surprising are the things that they don't see. As a business grows, things change and from the owner's standpoint, they still look the same. One of the first things that I do when I start an assignment, is to look at data that is already being captured in a company. I also interview staff to get the personal perspective. I invariably find things that surprise owners and managers. Through the interviews, I also find out why this is happenning and what may have caused the change. This helps me to provide advice to the owners and managers on how to address the issues that I found. This isn't even close to what business analytics is doing, but the concept is the same. There is no way that a small business could afford the cost associated with something of significant depth.

Why did I title the article business analytics and business process? Because I found an article that talks about the failure or success of business analytics is based on an understanding of business process. If you don't have a detailed understanding of your business process, you can't get good data and you can't get a good analysis of that data. Bad data means poor decisions.

If you develop good business processes, ensure that your software supports your business process to give you good data, you can analyze that data to help you make good decisions.