Investing in your staff

Living a day without learning something is a day wasted. It does not matter if the knowledge gained through a good or bad scenario. In fact the day you stop learning is the day you stop living. We should all pick up new skills, ideas, viewpoints and ways of working every single day.

The primary objective of any new business is purely to survive – you must establish that your business model works. One of the best ways to do this is by hiring exceptional staff that believes in your companies’ goals, you must also invest in your staff by helping them to develop their skills. You must understand that if your best people don’t grow within their careers as your business increases power and magnifies, staff will quickly lose interest for their work. Before you know it, you’ll be dealing with unsatisfied customers as well as unhappy employees.

Your employees’ craving to learn gives you and other entrepreneurs a competitive advantage over larger companies. Small companies are usually innovative, so they attract people who are keen to try different tactics and have rich ideas about how to do things differently, rather than employees who are working toward attaining a particular title.

You can take advantage of this by letting your employees run with their ideas – This is precisely the kind of training and profession that many creative people want: to be able to set challenging goals for themselves and then try to meet them, even if there’s a chance that they may fail. If you give your employees significant responsibilities, you will be surprised at what they will achieve – and in turn, you’ll win their loyalty and commitment.

Once you have created this culture of opportunity, your people will see that there is scope for them to move up within the company. They will then be more likely to strive to master their current positions so that they can be considered for promotion and further development.

If your employees need help with their technical skills, you’ll need to make up for your small budget by being smart about your training plans. Constantly improving and acquiring information technology skills is essential in many industries. If a number of your employees need the same training, consider alternate methods. Rather than sending 10 people to the same program, can you negotiate to bring a trainer in-house, keeping costs down? Instead of enlisting expensive private-training companies, can you find experts willing to give talks to your team? Can you reach out to your mentors, perhaps from contrasting backgrounds, to discuss the issues with your team? This could be more interesting — and more engaging — than traditional training.

Remember to stay on the lookout for new technologies and opportunities, and arrange seminars so that you and your employees can explore them, even if you’re not sure they can be immediately applied to your business. Who knows?  You could be onto the next big thing and your team will be one step ahead.

What is competitive advantage?

Everyone has got their own idea on what a competitive advantage is. Virtually anything could be considered as a competitive advantage, e.g. greater profit margin, better return on resources, valuable resource such as brand reputation or exclusive capability in producing a specific product. Every company must have at least one advantage to effectively compete in the market. If a company can’t identify one or just doesn’t possess an advantage, competitors will soon outperform you and force your business to leave the market.

There are many ways to achieve a competitive advantage two basic strategies for gaining an edge over your competitors are: cost or point of difference advantage. A company that is able to achieve dominance in cost or differentiation is able to offer consumers the products at lower costs or with higher degree of individuality and most importantly, is able to compete with its competitors.

Cost advantage – when a company can produce similar quality products or services but at lower costs. In this case the company can sell products at the same price as competitors but acquires higher profit margins because of lower production costs. The company that tries to achieve cost advantage is pursuing cost leadership strategy. Higher profit margins lead to further price reductions, more investments in process innovation and ultimately greater value for customers.

Differentiation advantage – Differentiation advantage is achieved by offering unique products and services and charging premium price for that. Differentiation strategy is used in this situation and company positions itself more on branding, advertising, design, quality and new product development rather than efficiency, outsourcing or process innovation. Customers are willing to pay higher price only for unique features and the best quality.

Regardless of what strategy your business adopts to achieve its competitive advantage you must ensure that you are able to measure and maintain your competitive edge over your competition.