Category Archives: Processes

Doing what you do best

We’re an e-commerce company.  We plan the site, add new products, manage the logistics and ship our products to customers.  Our focus and our specialisation basically falls into:

  • B2C Marketing
  • Logistics

It’s what makes us good and what keeps us successful so far.  What we aren’t are:

  • a B2B company
  • a publisher or manufacturer
  • a video production company

Both require expertise in areas that we do not have.  Focusing on what we do best generally generates the most profits – pushing out to areas where we don’t have expertise in, while good in terms of diversifying risk can also leave customers (current and future) unhappy with us.

It’s often better, especially when  you are small to focus on what you are best at.

Friends & Family – Working Together

So you own a business.  Now you’ve grown to a point where you might want to hire or outsource some parts of your business.  And oh, look – Bill’s an Accountant.  You like Bill. He’s been a friend for the last 5 years.  Maybe you should hire Bill…

Maybe not.

The Pro’s

  • Culture fit.  Sure, people are different in a professional vs social situation; but you have a good idea of his personality already.  And theoretically you socialise well together already, so he should fit your culture (if you brought your own personal values into the business that is).
  • Less ‘search’ time required – hiring someone new always involves a level of ‘searching’.  This way you cut that out.
  • 3rd party references might already be something you have – friends of friends, your sister, etc.
  • Backdoor access. Sometimes, some of the most talented people out there are happy with their current jobs / workload.  However, as a friend you might be able to drag them out of their comfort zone to work for you.

The Con’s

  • Social =/= Professional.  Just because he might be a stand-up guy in a social setting does not always translate to a professional setting
  • No skill assessment.  As you know them on a social level only, you haven’t assessed them on their actual workplace skills.
  • Future awkwardness.  What if you have to fire them? This could easily ruin your non-professional relationship.
  • Fraud.  A lot of fraud happens because we apply different standards for ‘friends’ compared to employees.  Things we would jump down an employees throat for, we might allow in a friend, which can create situations when fraudulent activity could easily take place.
  • Favoritism.  This is a dangerous one, especially if your friend is mildly more competent than your other employees.  You can start favoring them significantly more than other employees, over and above their actual skills because of this.

So, what should you do?

Hire them the same way you’d hire a total stranger.  Ask for references.  Get their resume (and check it over!).  Do an interview.  Treat them as if they are any other potential employee.  This not only sets the tone of your professional relationship, it also ensures that you have done as much as possible to ensure that they are the right people for the job.

E-Commerce Business: A Location Primer

E-commerce sales continue to grow at an outstanding rate.  In 2013 e-commerce grew by 13% in the US and is expected to continue to outpace growth in traditional retail.  However, running an e-commerce site successfully can be a difficult proposition.  Perhaps one of the first questions an entrepreneur needs to answer when starting e-commerce is how and where he will sell – his location in marketing parlance.  This primer attempts to answer that question.

There are basically 3 major ways to sell online:

1) Electronic Marketplaces

In electronic marketplaces, the entrepreneur lists his products on a 3rd party website.  Well known examples include eBay, etsy and the Amazon Marketplace.  Electronic Marketplaces generally generate revenue by charging stores a listing fee and/or a final sale fee.  Listings generally expire, forcing sellers to relist constantly.

Pros:

  • Extremely fast to set-up
  • You can test the waters for many different types of products for very low cost
  • The larger marketplaces already have a customer-base, decreasing need to market to attract purchasers

Cons:

  • Extremely difficult to build a brand
  • Customers are incentivized by the electronic markets to visit other sites
  • Often, price is the only method to compete on, forcing low margins
  • Entrepreneurs are at the mercy of changes to the Terms of Service of the markets

2) Software-as-a-Service (SaaS) Shopping Carts

SaaS Carts are a middle-ground where sellers can get the full functionality of a hosted online store; but require much less in-house IT knowledge. Many of these carts provide drop and drag professionally designed themes, fully integrated payment gateways and slick marketing and cross-selling features.    Yahoo! Merchant  is probably the best example of this type of software.

Pros:

  • Easy to brand website and business
  • Customer database is yours to analyse & market
  • Decent pricing, often starting as low as $15 a month

Cons

  • No control over hosting or gateway,  so service wide lockouts can affect your site
  • Regular monthly cost which can rise significantly as volume increases
  • Entrepreneur’s are ‘locked’ into the updates of the service chosen
  • No existing visitors like an e-marketplace, so customers must be developed internally

3) Hosted Shopping Carts

Hosted shopping carts run on the entrepreneurs own web server, and as such are completely owned and managed by the entrepreneur.  In such an environment, the entrepreneur manages the design and code issues directly.  For those who don’t have the background in IT, a good developer is invaluable.  A site like Fortress Geek is hosted on Magento, an open source hosted shopping cart.

Pros

  • Highest amount of flexibility for design and branding
  • The easiest to scale as the business grows
  • Can be the cheapest method at scale

Cons

  • Can be very expensive
  • Requires the entrepreneur to understand basic code and/or managing 3rd party developers
  • Bugs, security flaws and exploits all must be dealt with in-house
  • Costs can come in waves (developer fees) which can be harder to budget

 

Outsourcing on oDesk

We do some outsourcing on oDesk, mostly in an attempt to reduce our costs.  So far, the results have mostly been disappointing.  Here’s the major hurdles we have faced:

  • issues with language – comprehension of the English language isn’t that great
  • issues with following specific orders – even breaking down work point by point hasn’t worked all the time, so expect to go through one or two revisions to get it done right
  • work not as advertised – let’s just say that sometimes the portfolio’s provided aren’t the same as the work you’ll get

In general, take the amount of time you’d expect a job to take if it was done properly the first time round and multiple that by 3. If you’re lucky.  Now, most of the time you’re paying 1/10th of the cost of doing it in-house or in the West, but it’s still a lot more hand-holding.

In addition, here’s a few tricks that the oDesk contractors have come up with:

  • Applying with 1 contractor profile, then after you are ready to award the project asking you to push to profile 2.  If they do not meet your expectations, when you review them normally – their main profile isn’t affected by the lower than expected work
  • Harassing you via Skype to give them a better review
  • Overstating their qualifications then bumming around on work to run up hours
  • Taking on more projects than they can handle, then providing constant excuses

Overall, there’s a few projects I’d outsource and a ton that I wouldn’t. Here’s what I’d do via oDesk:

  • basic installations & theme designs. If you’re not interested in particularly high-quality themes and just need a basic website, it’s not a bad place to go
  • basic graphic design.  Great for simple banners, posters, advertisements, etc.
  • writing help.
  • basic web-research.

Now, here’s some recommendations to working on oDesk or its equivalents:

  • always use the main profile, never work with someone on another profile
  • consider doing multiple small jobs to find a few good workers.  Then expand it into that job
  • always break down your work into parts and give the work in parts out
  • check immediately.  So if you need an excel sheet fixed, have them do 5% of it, then check. Or 50 lines, or whatever.  Then check.  Re-check during various stages
  • pay more.  Don’t work with the lowest cost producers – you want to work with those with a higher price because they’re generally better and have more experience
  • consider individuals from Eastern Europe.  They charge more, but the quality is often significantly better

 

Time dilution & letting go

One of the hardest things about running your own business is learning to let go.  Once it becomes your work, your baby – learning to release parts of your work to other people – whether or not they are better, is very difficult.  In fact, for some people, it’s impossible.

We’re facing that problem now – we’ve grown to an extent that we have to actually hire someone soon, yet finding the right person and letting them handle the business process is difficult.

There’s a few things you can do though to make it easier on yourself:

– creates policies & procedures

Think ahead, create the policies and procedures necessary and write them down.  When you hand over the job to someone else, they can then just  follow the policies.  This means it’s easier to teach them, and just as importantly, they know exactly what they need to do to satisfy your standards.

– hire good people

Kind of obvious, but you have to make sure to hire the right people.  If you don’t you’re just leaving yourself open to more heartache.

– be patient

Provide time for your employees to get up to speed, remembering that they need time to learn what you’ve known for months or years now.

– create a list of your ‘new’ tasks

You’ve now given the job to someone else; so what are you doing? Make sure to have a list of new tasks that you now tackle in that free time.  Keeping yourself busy is one way to take your mind off the old work.

– check-in regularly; but not too often

Lastly, for your own peace of mind, set up a regular check-in schedule.  Just make sure that the schedule isn’t ‘every 5 minutes’ and you can provide both the oversight and hands-off approach needed.  Generally, 10-15 minutes quick summary at the beginning / end of a day and a weekly longer meeting should be fine for most jobs.