effective business practices 101 (7/8): market and environmental health considerations

Market & environment health.No matter how well your business is doing, its success depends on how favourable and sustainable

are your market and environment conditions are. And since you are building the business for the benefit of your customers and your own well-being it makes sense to make positive contributions.

Mini-assignment.

❶ Throughout this lecture, think of at least one question to ask me at the end of this class.

Review.

❶What is the competition?

❷What is the demand?

❸What are the costs?

❹What is the ROI?

What tools can you use to research your decisions?

What is diversification?

Experiments.• Try your ideas on small scale

before going big.

• Learn from those test runs whether it is a good idea.

• Not the same as market research, your own opinion or prediction about what would happen. Experiments are actually you conducting the business on a small scale.

Things you can measure:

• Income.

• Costs.

• Amount of work required.

Collect & synthesize.

• Collect a good sample of feedback (at least 10 people).

• Sort your feedback based on opinions and suggestions.

• Think how it could apply to your business.

Applying feedback.Evaluate each customer complaint, praise or suggesting:

• Is it feasible to make the changes?

• Does it align with your business objectives?

• Learn about your business from the customers’ perspective.

Empathy exercises.

• Create a customer story for your business or product.

• Be your own customer. If you hate your product, your customer probably does too.

Kinds of information.

• Data about the market: competition, demand.

• Operational data: costs, potential revenues, ROI.

• Customer data: feedback, average & ideal customer traits.

Google Sheets.Have you downloaded Google Sheets? Did you start tracking your data? Don’t

forget to add more data every day. Any questions or problems with Google Sheets?

Collaboration.• A team of like-minded small

businesses have a potential to change attitudes and even laws.

• Together, small businesses might negotiate better prices from the suppliers.

• When businesses get together they can have a larger buying power to advertise, thus bringing more customers to their sector.

• It’s very common for businesses to partner with governments to mutually benefit each other.

Disruption.• Disruption means finding new ways of

conducting a business.

• This method can “disrupt” or “break” the existing market or industry. The “old” way of doing things is no longer good enough.

• Companies who can achieve this often become very prosperous very quickly.

• Alternatively, those companies benefit or change the marketplace and are often good for the customer.

• Most often “disruption” is referred to in online business but there are examples in the real-world as well.

The list.• Research.

• Diversify.

• Manage feedback.

• Apply empathy.

• Track everything.

• Collaborate.

• Disrupt*.

*Depends on your business objectives.

Market & environment health.Where would you like to live and operate your business?

Why do business neglect environment?

• Short-term thinking, false assumptions of infinity of resources.

• Lack of resources to change operating methods.

Short-term thinking.• Full effects are hard to see unless

they are calculated over time.

• We live on a vast planet where resources might seem abundant (they aren’t).

• Our actions might seem insignificant, but they make a lasting impact over time, together with other offending patrons.

• Example: Nyang Shwe township might be wasting over 120,000 tons of clean water every year due to dripping taps.

How much water are you loosing at home?

http://water.usgs.gov/edu/activity-drip.html“convert gallons to liters"

What is it doing to local businesses?

Resources.• Calculating the amount of

resources required to make a change is hard. How much is acceptable to spend to benefit sustainability?

• Consider the water tap example. How much would it cost to replace the tap vs. what is the price of water lost? How much time would equal to the price of a tap? What if the price of water keeps rising?

Financial and obligatory pressures.We all tend to think that we are better than “that guy” but when it comes to actions required for personal and business survival we are often forced to act in a way we thought we wouldn’t.

Greed.Is a natural human tendency. It is the drive to turn a successful business into an

even more successful one. It’s not a bad word or bad quality, it is who we are (like many other animals).

Unhealthy market.• Monopolies prevent choice for

customers and other businesses from operating.

• Lack of business diversity drives competition up and opportunity down.

• Lack of or declining:

• Resources.

• Customers.

• Security.

• Stability.

Environment Market

Venn diagram. How would you arrange the below ideals: market,

environment or both?

• Resources. • Security. • Customers. • Local population well-being. • Diversity. • Monopoly-free. • Stability.

Environment Market

• Resources. • Security. • Stability. • Customers.

• Diversity. • Monopoly-free.

• Local population well-being.

Do you have any others to add?

What happens then?Can you operate a business in a marketplace that is unhealthy or failing as well as if it was healthy and supportive of your ventures?

How do you control for environmental and

market degradation?

Environmental and market management.

• Understanding & continuously researching offensive impacts (not always obvious).

• Government laws and initiatives.

• Social attitudes (media, advertising).

• Business prerogatives (collaborations with clear objectives).

• Personal conservation planning.

• Measurement and standard setting.

Understand impacts.• Remember dripping tap

example: it seems as if it’s not a big deal, but once you do your research it’s a tremendous loss.

• Some decisions are difficult or non-obvious. Example non-GMO products.

• Can you think of another non-obvious example?

Government policies.• Country, regional, town and

enterprise governments all are familiar with the environmental and market conditions. It is in their interest to act favourably.

• However, there still needs to be pressure applied constantly in order to influence the policies to favour small businesses and individuals over large corporate donors.

Social attitudes.• Consumers tend to favour eco-

friendly and local products more and more. This attitude shifts revenue towards business that follow those practices.

• Remember that consumer might not always realize what “eco friendly” or “good for small business” really is (regardless of their good intentions).

• Their attitudes could be further altered by presenting your good business practices in a favourable light (ad campaigns).

Business policies.• Collaboration could lead to better

positive impacts on both the market (i.e.: fighting monopolies) and the operational environment (i.e.: better waste disposal).

• No business lasts forever, however the consumers and the beneficiaries of the business might want to prolong and better their lives. Therefore it’s important to consider into business objectives the policies which could benefit both the environment and the market/community it operates in.

• Occasionally, the environment is actually the main source/reason of income. Consider tourism: would anyone come to see a polluted territory operated by a monopoly?

Setting & measuring standards.

• What is an acceptable environmental impact? Consult research and scientific sources about what would be a sustainable practice (remember that it might not be obvious).

• What are the favourable market conditions that could breed innovation? How can your region succeed and stand out from the competing markets?

• After setting the guidelines create a plan and policies (company- or community- wide).

• Follow those guidelines and monitor (track) and deviations.

• How can you enforce those policies as a company or a community? Ensuring that your rules work is just as important as creating them.

Assignment.❶Pick one of the following

businesses: delivery company, restaurant business, tour guide company.

❷ List potential (at lest 3) environmental impacts.

❸What would be considered a healthy market for your business? List at least 3 properties.

❹Create a company policy to alleviate environmental impacts.

❺How can your business contribute to a healthy market?

The list.• Research.

• Diversify.

• Manage feedback.

• Apply empathy.

• Track everything.

• Collaborate.

• Disrupt*.

• Practice market & environment sustainability.

*Depends on your business objectives.

Mini-assignment.

❶Your questions, please :)