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Baltic State Academy
Fishing Fleet
Department of Marketing
“Service Commerce”
Completed by: 1st year student
groups K-11
Efimov Artem
Scientific adviser: associate professor of the department
marketing Matveeva E.A.
Kaliningrad 1999
Introduction
> Types and sectors of services
> Service entity
> Main characteristics of the service
> Service classification
> The role of services in the economy
Conclusion
Bibliography
Introduction
The life of a modern person, one way or another, is connected with services. After all, to
trade in services includes the provision of utilities, communications, and
banking business, and wholesale and retail trade, transportation,
as well as insurance, legal, medical, educational services and
etc. Both the income of the state and the profits of firms depend on the quality of services.
comfort, safety, and welfare of consumers.
The connection here is direct and obvious: quality services attract attention,
cause a desire to use them to make life easier. Gradually
the current positive situation in the retail trade allows
consumers to compare one service with another, and encourages
competitors to provide ever-improving services while providing
their qualities.
The need to develop the service sector requires a significant restructuring
structure of consumption of the population, a significant increase in the share of services and
reducing the share of material consumption. Need fundamentally
improve the quality and culture of service, expand the network of relevant
enterprises, increase the volume of sales of services, introduce their new types and
forms (this is especially beneficial for the Kaliningrad region, which is visited by
a large number of tourists).
One of the main phenomena of American reality is
gigantic growth in the service sector. Today it accounts for 73% of the jobs
the number remaining after deducting all those employed in agriculture. For
comparison: in Germany, 41% of the workforce is employed in the service sector, in Italy - 35%.
Growing wealth, increased free time and
the complication of goods requiring maintenance have turned
The United States of America is the country with the world's first service economy.
Types and sectors of services
The service industries are extremely diverse. To the service sector
includes the public sector with its courts, labor exchanges, hospitals,
loan offices, military services, police, fire brigade, post office,
regulators and schools, and the private non-profit sector with its
museums, charities, churches, colleges, foundations and
hospitals. The service sector also includes a good part of the commercial sector with
its airlines, banks, computer service bureaus, hotels,
insurance companies, law firms, consulting firms
management issues, private practitioners, film companies,
repair of plumbing equipment and real estate firms.
Service sectors:
1. Airlines.
2. Transport organizations (railway, water, automobile).
3. Hotel industry.
4. Insurance companies.
7. Household service.
Along with the traditional service industries, there are constantly emerging
new services. There are companies that will help you for a fee
balance your budget, wake you up in the morning, take you to work or
they will find a new house, a new job, a new wife, a predictor of the future, etc.
Maybe you would like to rent a garden tractor, a few heads
cattle or a few original paintings? If a
you need business services, other firms will plan your participation in
conferences and trade meetings, develop the right products for you,
process the necessary data or provide you with temporary
secretaries and even managers.
Service entity
Services are understood as a wide variety of activities and
commercial activities. The service is defined as follows:
Service - any activity or benefit that one party can
offer another and which are basically intangible and do not lead to
possession of something. Service production may or may not be
associated with the product in its physical form.
Renting a hotel room, saving money in the bank, traveling by plane,
visiting a psychiatrist, getting a haircut at the hairdresser, renting a car for repair,
in all these cases we purchase services.
Services have four characteristics:
1. Services are intangible. They cannot be seen, tasted, heard
or sniff prior to purchase. A woman who "renews her face"
cosmetologist, will not see results until he buys the service, and the patient,
who comes to see a psychiatrist, cannot know the result in advance
visits. The buyer is forced to simply take the word of the seller.
To build confidence in itself on the part of customers, the service provider may
take some concrete steps. First, he can increase the tangibility of his
goods. A plastic surgery specialist can draw how it will be
look like the face of the patient after surgery. Secondly, he can not only
describe your service, but focus on the benefits associated with it. So,
a college admissions representative can tell potential
students not only about campus life, but also about how great
graduates of this institution are arranged after graduation. Thirdly, for
increasing the degree of trust a provider can come up with for their service
brand name, for example, Ideal Service (luxury vacation),
service "On the red carpet" (i.e. as high honored guests). AT-
Fourth, to create an atmosphere of trust, the supplier can attract
promotion of their services to any celebrity.
2. The service is inseparable from its source, be it a person or a machine, then
as a commodity in a material form exists regardless of the presence or
the absence of its source. Let's take for the reception attending a concert by Mark
Almond. Spectacular and entertaining value is inseparable from the performer.
The service will not be the same if the host announces that Almond is unwell and
will replace Masha Rastputina. This means that the number of possible buyers
services, i.e. those wishing to attend a "live" performance of Marc Almond,
will be limited to the time of the performer's concert tour.
There are several strategic approaches to overcome this
restrictions. The service provider can learn to work with more
numerous customer groups. Psychotherapists have already switched from
therapy of individuals or small groups to work with large audiences,
when more than 300 people are present at a psychotherapy session at once.
The service provider can learn to work quickly. The same
a psychotherapist can spend on each patient not 50, but 30 minutes. and
accept a lot more people. The service organization can prepare
more service providers and thereby strengthen the credibility of the
client side, as, say, H. & R. Block did, expanding
its nationwide network of tax advisors.
3. Inconstancy of quality. The quality of services varies widely across
depending on their suppliers, as well as on the time and place of their provision. AT.
Sassoon will cut your hair much better than a young man who just graduated
hairdresser. But Sassoon himself can cut your hair differently depending on
their physical condition and mood at the time of the haircut.
Buyers of services are often aware of this variation in quality and when choosing
service provider consult with other buyers.
To ensure quality control, service firms may conduct two
Events. First, allocate funds to attract and train
really good professionals. Airlines, banks and hotels spend
considerable sums to train their employees in the art of good service. AT
any hotel "Marriott" the visitor will be met by equally helpful and
friendly workers. Second, the service provider must constantly monitor
for customer satisfaction through a complaints system and
offer, surveys and comparative purchases to identify
cases of unsatisfactory service and correcting the situation.
doctors charge a fee from patients who did not appear at the reception, is that
that the value of the service existed at the time of the patient's absence. AT
under conditions of constant demand, the perishability of the service is not a problem,
for it is possible in advance to properly staff the organization. And here
if demand fluctuates, service firms face serious problems.
For example, taking into account the need for transportation during peak hours, enterprises
public transport have to have much more transport
funds than would be needed if the level of demand for
throughout the day.
On the demand side
1. Establishing differential prices can shift some of the demand from
peak times for quiet periods. Examples of this "approach
Setting low prices for pre-evening screenings in cinemas and prices with
discount car rental during the weekend.
2. You can deliberately cultivate demand during periods of its decline. Firm
McDonald's has come up with a special breakfast for children called "Happy
Meal”, and hotels began to offer mini-vacation programs for the weekend.
3. During periods of maximum demand, you can offer additional services in
as an alternative for waiting customers, for example,
arrange a cocktail bar for visitors waiting for a table in a restaurant or
access to an ATM.
4. One way to manage the level of demand is to introduce systems
pre-orders. Such systems are widely used by airlines,
systems and doctors.
On the supply side
1. To serve customers during periods of peak demand, you can
engage temporary or part-time employees. At
increase in the contingent of college students attract additional
teachers for temporary work, and the restaurant, if necessary, takes
for temporary work an additional number of waitresses.
2. You can set a special work schedule during the peak period. AT
At such times, employees perform only the most necessary duties. AT
during the period of maximum loads, doctors are assisted by paramedical personnel.
3. You can encourage the implementation of more work by the clients themselves, who
can fill out their own medical records or independently:
pack products bought in the store.
4. A collaborative service delivery program can be developed, such as
in cases where several hospitals jointly acquire the necessary
medical equipment.
5. Action can be taken to enable the growth of existing
capacity, as in cases where an amusement park acquires
surrounding land for further expansion.
Commerce in the service industry includes the rental of goods, alteration or repair
goods owned by consumers and personal services. sometimes mixed
goods and services. However, when we buy the use of a hotel room, we
we take nothing with us, except for the memory of living. Despite the fact that
the consultant's output may be in the form of a bound message,
the consumer buys intelligence, not paper and ink.
Service classification
Among the first attempts to classify services, the ideas of which received their
further development, include the work of Stanton and Judd,
Stanton differentiates commercial services into 10
groups including:
1. housing services;
2. family services (home repair, landscaping, residential cleaning
premises, etc.);
3. recreation and entertainment;
4. individual sanitary and hygienic service (washing, dry
cleaning, cosmetic services, etc.);
5. medical and other health services;
6. private education;
7. business and other professional services (legal,
accounting, consulting, etc.);
8. insurance and financial services;
9. transport services;
10. communications services.
In this list, we would like to draw attention to the seventh group, in which
under the term professional services diversified are united. AT
Later this idea served as the basis for one of the fundamental
signs of classification of services in, namely:
their division into professional (professional) and non-professional
(nonprofessional).
Judd proposed his scheme for classifying services, highlighting three fundamental
Services related to physical goods that the customer owns and
who uses, but not on the rights of the owner;
Services related to physical goods owned
Services not related to physical goods.
Note that Judd's idea of identifying the nature of the links between services and physical
goods undoubtedly was the prototype for a number of signs that
today are used in various schemes of marketing classifications. AT
In particular, two years later, in 1966, Rathmell3 published
research results on the structure of various product offerings with
highlighting the specific weight of the physical and service components in their
composition. At the same time, the basis of the primary grouping of services by Rathmell is almost
Stanton's list was adopted in its entirety (eight groups out of ten).
Based on the results obtained, Rathmell arranged the analyzed
product offerings along the horizontal axis as they increase in their
composition of the specific gravity of the service component, which was a clear
illustration of the described sign of the classification of services. In 1974 he
it was proposed to classify services by types of sellers and buyers,
on the motives and practice of making purchases, as well as on the degree of their
regulation
The late 1970s and early 1980s were marked by an explosive wave of deepening and
expanding the composition of features of the classification of services.
Building on the work of predecessors, Shostak (1977), Sasser, Olsen and
Wykoff (1978) develop the content of the relationship of physical goods and services
as part of product offerings, naming the latest product packages.
Shostak introduces a spectral scale of services with a distinction between tangible and
intangible dominant, and also offers a molecular model,
describing the composition and relationships of tangible and intangible elements of the service.
In 1978, Hill makes a distinction between services with an impact on people.
or on physical objects and between individual and collective
services. In addition, a differentiation is made between the effects
caused by the provision of services, namely between:
permanent and temporary;
reversible and irreversible;
Physical and mental.
In the same year, Chase proposes to classify services according to the degree of required
contact (high - low) of the service organization with customers, and Thomas - in
depending on whether the provision of services is based on human labor
or on the use of the equipment. They singled out two, the most common, groups
Based on the use of human labor (people based
Based on the use of technology (equipment based services). In my
turn the first group of services includes:
Services performed by unskilled workers (unskilled labor);
Services performed by skilled workers (skilled labor);
Services of professional workers (professionals). Second group of services
subdivided into:
Automated (automated);
Performed by relatively unskilled operators
(monitored by relatively unskilled operators);
Performed by qualified operators (operated by skilled
In 1980, Kotler synthesized the works of his predecessors, while highlighting
differences in the objectives of the activities of service organizations, and Lovelock conducts
different services for:
Basic characteristics of demand;
delivery procedures.
Having shown an enviable analytical and creative activity, Lovelock in 1983
makes a publication in the Journal of Marketing containing a summary of
approaches to the classification of services in marketing, as well as the matrix principle for
development of new assay schemes This publication receives the prestigious
awards, and the arsenal of marketers is replenished with a very weighty and flexible
tool.
So, Lovelock's first and most important matrix is based on two
fundamental features of the classification of services:
The composition of objects (to whom or what actions are directed, which are the essence of
The nature of these actions is whether they are tangible or intangible.
representing:
1. Performing tangible actions directed at people (for example,
transportation by plane, hair cutting, surgery, etc.). During
these service delivery processes require a physical presence
customer so that he can receive the desired benefits.
2. Taking tangible actions that target physical property
customer. For example, freight transportation, lawn mowing, summer cottage security, etc.
In these cases, the physical object of the customer must be present, but not itself.
customer.
3. Intangible actions aimed at the human mind, such as
radio and television, education (mental stimulus processing - mental
stimulus processing). In this case, customers must be present
mentally, but can be either in a special room where
service is provided, or at a specific location, communication with which
carried out by means of transmitted signals or by means of
telecommunications.
4. Intangible actions aimed at intangible assets (insurance,
information processing, investment, banking, etc.). For
provision of these services, the direct involvement of the customer may be
unnecessary (at least in theory) - enough to be initiated
service order.
By taking a deeper look at this matrix, Lovelock is creating a platform for
differentiation of possible strategies of service organizations based on the concept
customer involvement in the service process. Considering content
service component in a product offering as
differentiating feature, Kotler in 1991 proposed to identify
four product groups
1. A pure tangible good. In this case, tangible
the commodity is, for example, soap, toothpaste or salt. The product is not
involves the provision of any services.
2. A tangible good with related services (a tangible good
with accompanying services). In this case, the offer is
tangible product and one or two related services to make it
even more attractive in the eyes of the buyer (to enhance its consumer
appeal). For example, a company that manufactures cars sells them with
warranty obligations for repairs, etc. Kotler refers to
Levitt, who notes that "the more complex the type of product produced
(e.g. car, computer), the more its implementation depends on
the quality and availability of related services provided to the consumer
(e.g. showrooms, delivery, repair and maintenance,
operating manual, training of operators of devices sold and
machines, fulfillment of warranty obligations). General Motors is
for example, rather a service-intensive company (more service-intensive),
rather than manufacturing-intensive. If she
did not provide services, then the volume of its sales would immediately decrease "
3. Core service with minor related goods and services (a
major service with accompanying minor goods and services). In this case
the main part of the offer is a service with some additional
services and/or supporting goods. For example,
air passengers acquire the right to transportation services. They arrive at
destination, without having anything tangible in hand, indicating
their costs. However, the shipment included such tangible products as
meals and drinks, ticket stub and magazines offered on board
aircraft. Finally, for the implementation of transportation services, it is necessary to have
such a capital-intensive commodity as an aircraft, but the bulk of the supply
nevertheless constitutes a service.
4. Pure service (a pure service). Here the proposal consists in the first
service queue. An example of a pure service would be psychotherapy and massage.
The psychoanalyst provides a pure service where the only tangible
the commodity is his office.
Kotler emphasizes that services also differ depending on whether
whether they are aimed at meeting personal needs (personal needs) -
personal services or business needs
needs). The doctor charges a different fee for a medical examination depending on
whether his patient is an individual or an employee of a company that has
contract for medical care (an employee on a retainer).
Service providers typically develop various marketing programs to
market of personal services and market of services to enterprises.
Finally, service providers differ in their objectives (objectives),
which may be profit oriented or
non-commercial (non-profit - nonprofit) activities, as well as
the nature of the property - private (private) or public (public). AT
The combination of these characteristics results in four different types
service organizations. It is clear that marketing programs
hospitals with private capital will be very different from programs
a similar institution created by a charitable foundation.
Despite the already existing fairly solid
development of the foundation for the classification of services in marketing, this process cannot be
specialists, at the time of revolutionary changes, the service sector requires everything
new and new marketing ideas. In particular, a serious catalyst
here is the development of information and biotechnologies, as well as means
telecommunications.
In our opinion, the world of service has already taken a step into a new dimension, where one
one of the first questions that many managers will need to answer
companies, along with the classic - what kind of business do we do? - will -
What market space are we going to operate in?
The previously traditional single market space now has two
components:
Existing in reality - real market space
Existing in virtual reality - virtual market
space (GRP).
Introducing this new feature into the commercial classification of services, we also
reflecting the actual reality.
According to Western experts, in the near future, banking institutions
expect revolutionary change. Development of telecommunications and facilities
computing technology will enable millions of employees to work from home.
The need for office buildings and office space will be reduced.
The house will become for the employee the workplace where it will be processed
information.
The first step on this path has already been taken. In October 1995, the first
the world's virtual bank (Security First Network Bank). It provides
its customers the ability to pay bills and check their balance through
World Wide Web. But customers cannot go to the local branch of the bank, so
how it works on the Internet. The address of this bank: http:// www.
sfnd.com. The bank's clients are located in 45 US states. They deal with checks
and deposit accounts, maintain electronic budgets. The bank plans
virtual securities trading, credit card transactions,
mortgage lending and issuance of consumer loans. And its global goal
A full range of interactive banking services in real time
around the clock. Virtualization will allow in the future to reduce the bank's costs for
personnel and capital construction. Notably, Security First
Network Bank pays out on a certificate of deposit for a period of 1 year and
with a minimum amount of 1500 dollars. 6% per annum - this is more than other banks.
One of the factors stimulating such changes is the expansion
time-saving opportunities for customers, reflecting their desire to receive
faster and more convenient service. Paradoxically, but electronic
contacts can contribute to the convergence of producers and consumers
services. Service organizations are increasingly aware of the possibility
improving services through the use of modern technologies.
The role of services in the economy
In connection with the growth of trade, the exchange of services increased sharply: scientific and
technical, industrial, commercial, financial and credit
character. The active trade in machinery and equipment has given rise to a number of new
services such as engineering, leasing, consulting, information and
computing services. Based on information technology and
telecommunications, many types of services have crossed national borders
integrate the global market. A powerful impetus to this process since the mid-90s
give the Internet and other network information transmission systems. Volumes
exports of world trade services increased by 1997. up to 410 billion dollars and
are approaching 1/4 of the value of merchandise exports. In terms of dynamics and
in the foreign trade sphere, the group of business services is in the lead: their share in exports
services from developed countries increased to 44%.
Tourism remains a major item, the share of which in the cost of services
exceeds 1\3. Foreign trade turnover in services is concentrated in the group
developed countries. The main exporters are the USA, Holland, France and
UK, heavily import services Germany, Japan
Italy. And here, financial and computer services are leading in terms of growth.
consulting on marketing, management, efficiency improvement
etc. In 1997, developed countries accounted for 88% of all exports
business services. New technologies significantly expand the scope of external
trade in health, education, science, culture and
art. The non-transportability of many services will determine more
a major role of foreign investment in this area. to direct foreign
investment as an alternative form of foreign trade operations actively
resorted to multinational companies in many industries. Direct investment
go into telecommunications, trade and many service industries - public
food, banking, insurance business, business services,
healthcare, etc. Although legal and political barriers to
international exchange in this market remain until recently more than
higher than commodity markets, services to actively promote
globalization of economic life, accelerating and deepening this process.
The United States of America is often presented as the country with the most developed
service economy in the world. In the private sector, 75% of employees work in the
service. In the 1960s, the average family spent 40% of their budget on
services. By 1985, this figure had reached 50%. During the same period, the annual
spending on services rose from 131 billion to I. 3 trillion. dollars for final
consumers, 80% of which are housing, medical care and
home goals.
Various reasons for the growth in end-user services are cited, such as
improving the well-being of the population, the availability of complex goods that require
specialized installation and repair, etc. In industry, business and
repair services have also experienced a boom in the past decade.
growth. The most dynamically developing of them are: computer repair
and training to work on them, management consulting, engineering and
equipment rent. Despite these impressive numbers, service data
underestimated. They do not include the hidden services sector, which is related to the supply,
installation, maintenance, training, repair and other services that
provided by firms that focus on the sale of goods. For example,
despite the fact that Apple and Xerox are classified as
manufacturers, many of their employees are involved in dealer training programs and
users, in maintenance, supply of spare parts and warranty
Competition between credit systems is extremely intense.
cards. Among the top three systems in this area is Visa ($77 million).
cardholders within the United States and a total of $80 billion in transactions
year), "Mastercard" (60 million owners in the United States and an annual turnover of 40 billion rubles).
for merchants to recognize their cards, and offer
additional services such as traveler's checks and cash payments. One
of the newest firms in this area is a division of Sears -
Since there are currently several million personal
computers, another area of service is flourishing - computer repair. Now
PC owners spend $1 billion annually on repairs.
dollars - the amount, which, according to the assumptions, will double. the largest
an independent firm (i.e.: not associated with any of the computer manufacturers)
is a TRV that carries out 100,000 repairs for firms, or
locations, or at a TRV repair center.
Examples of the Kaliningrad services market
The Kaliningrad market of services is presented in all its diversity. We
we can buy literally any service we need.
Among them are household: "Express-washing", "Express-cleaning", cleaning of apartments,
houses, window cleaning. Emergency opening of locks - firm "Riva".
Printing: GS, incl. and advertising.
Hairdresser services: salon "Maria", salon "Renaissance"
Insurance companies: Aini, Rosgorstrakh-Kaliningrad.
Audit: "BaltAudit"
This is only a small part of what we can use in Kaliningrad
service market.
Conclusion
Based on the foregoing, we can conclude the importance of services in
our life. The service market is constantly evolving and
improvement. Many services are characterized by high costs and
low reliability. One solution to this problem is to use
complexes of hard, soft and hybrid technologies. solid technology
associated with the replacement of equipment, such as the use of electronic systems
credit confirmations instead of manual credit checks. This
technology cannot be applied where significant personal qualifications are needed
and contact, for example, in the provision of medical, legal services,
hairdressing.
Soft technologists replace individual services with pre-planned ones
complexes. For example, many travel companies sell in advance
planned travel. Among them are such Kaliningrad firms as
Mik-Avia, Anyuta, Baltama Tours and others.
Bibliography:
N. Chechetkina Marketing №2 1999 \\ Analysis and evaluation of competitiveness
retail services.
E.A. Matveeva Submodels of Marketing, Kaliningrad 1996
E.P. Golubkov Fundamentals of Marketing, Moscow 1999
A. Chelenkov Marketing №3 1998 \\ Basics of classification of services as
marketing product
Newspaper "Extra-Press" No. 33
National Library of Congress USA (stat. data)
I have little faith in strategic planning in the early years of building and growing a new service business. How is it recommended to proceed with classical managerial planning? First you need to define the mission of the Company and its strategic goals. Then paint a strategic plan of action for the next three to five years. Based on this, draw up a medium-term action plan for the coming year. Then draw up an operational plan of action for the next two to three months. Then, every week, perform certain actions outlined in the operational plan. Review the operational plan once a month, review the medium-term plan once a quarter, and review the strategic plan once a year.
In theory, everything looks good. But in practice - what's the point of painting detailed plans for five years ahead, when a simple adjustment of the price list can radically change the whole essence of the business? Including the average amount of the transaction, the circle of target Clients and the geography of sales? After all, there is only one thing we can know for sure about the business in the service sector: its essence changes quite often. Sometimes - strongly, sometimes - dramatically. In fact, we start building one business, after a while we turn it into a second one, then into a third one. Sometimes you have to create a new business on the basis of the previous one five or even seven times, until the next attempt is finally successful.
Therefore, two things are enough to develop a business in the service sector. First, you need to set strategic or medium-term goals. A few are best (just like when setting life goals). If there is only one goal, the development of the Company will go inefficiently. After all, not at every moment of time you will be able to successfully make efforts to achieve this goal. When there are several goals, you can temporarily switch to achieving any of them. And when there is only one goal, there is nothing to switch to during the period of forced waiting, and the business will be idle. On the other hand, if there are too many goals, attention and resources will be too much scattered between them. The best option is three or four goals. Of these, perhaps only one will become a priority. And the rest will be essential, but not as important as your main goal. In addition, at least one of the goals must be of a financial nature. No matter how you strive to develop your business, you must not forget that all this results in an increase in turnover and income.
Secondly, for each of the goals you set, you need to draw up plans for the next actions, thanks to which you will move towards achieving these goals. Such plans can be completely informal. And look, for example, like a simple list of steps, written down on a leaflet of your favorite diary.
Why do we paint only the immediate actions, and do not draw up a detailed plan? I am deeply convinced that we initially do not know exactly how we will go to our goal. And we cannot know it. From the moment we embark on the path to achieving the goal, we begin to gain relevant experience. And the more we have already done, the better we understand how to proceed. Of course, as we gain experience and receive additional information, our vision of how to achieve the goal can change dramatically. It would be strange if a merchant negotiated with his thousandth Client in the same way as with the first. Therefore, you do not need to try to foresee all the nuances. We have planned the next actions - we carry them out. We took the first steps - it became clearer what the next ones should be. So we keep going until we reach our goal.
Setting worthwhile goals and doing the right things to achieve them will have a very positive impact on your business. But you can get the most powerful results from crazy ideas. That is, such goals, the achievement of which initially seems almost unbelievable.
For example, the implementation of several crazy ideas had the greatest impact on the creation and development of the Rusnet Company.
- So, the very idea that formed the basis of the business seemed completely unrealistic in those days. How can you provide Internet access services without using the infrastructure of the city telephone network? How can it be that the Internet provider does not depend on the GTS? And the fact that it is possible to build a data transmission network over some kind of radio channels with a noise-like signal and a power lower than that of a cell phone seemed like a drug addict's delusion.
- Later, fellow competitors from Omerta drove us into a corner. Its owners invested colossal administrative and financial resources to become co-owners of Transtelecom, which pulled the only backbone fiber optic channel to our region. It was known in advance that Rostelecom would use someone else's optics for its own purposes as part of the exchange of trunk channels. And for many more years it will not conduct its fiber-optic backbone to us. Obviously, from the moment the backbone optics was put into operation, all Internet providers using less advanced backbone channels should have been uncompetitive. In addition, Omerta was not going to provide access to Transtelecom's optics to other Internet providers. She preferred to strangle everyone and monopolize the market. However, we were able to build an alternative trunk channel of decent quality on the subcarrier frequencies of Rostelecom's radio relay channels. This seemed unbelievable to our colleagues a few months after the canal went into operation. They believed that this was a reality only when we took away a lot of Clients from them.
- It was utter madness not only to conduct active commercial work, but also to massively advertise our Company during the period of fierce license wars. It is clear that all inspection and control organizations first of all went to visit the most prominent Company on the market, that is, to us. However, a year has passed, license wars have subsided. And it turned out that during this time a significant part of the clients of those Companies who were sitting quietly and trying not to attract attention to themselves, switched to serving us.
- No less crazy was the idea to create a city portal that would actually monopolize the information representation of our region on the Internet. Such a portal that would have an overwhelming superiority in the volume, quality and efficiency of information over other Internet resources in our region. And also would have achieved a colossal advantage in attendance and popularity. It is believed that it is impossible to establish a monopoly in the market if competition is not limited in any way and new participants can take part in the competition at any time. However, our Internet portal has been steadily occupying the position of the absolute leader for more than 10 years.
- With the growth of the client base, the problem of poor-quality customer service became more and more acute. One fine day we asked ourselves: “Can we serve 100% of our corporate Clients with 100% quality? How to ensure that the Internet access they provide is fast, reliable, and can be verified and verified objectively?” It was then that we came up with and brought to life our famous VIP program. A year and a half after its launch, the last shortcomings in customer service were eliminated. From that moment on, we had an objective confidence that all our Clients are served with high quality. And any deviation from this principle is corrected immediately after detection. And as fast as humanly possible. The regular implementation of the VIP program has had a tremendous impact on the satisfaction of our Clients and our reputation in the market. And financially, it turned out to be just a gold mine.
- At one of the trainings in which I participated, I was poked with the nose that the connection of the Client to the Internet via a radio channel in 15 days does not stand up to criticism in terms of efficiency. Prior to that, we were proud of the speed of connecting our Clients to our network, since it took two or three months for competitors to get an equivalent connection. But it turned out that the Clients want and demand more. And most importantly, we realized that we can give it to them. And we set ourselves a crazy goal - to reduce the average duration of a radio connection to two business days. And if possible, connect Clients within 24 hours after payment. It took more than a year to achieve this goal. But as a result, we have received a unique competitive advantage, which has not yet been surpassed by any of our competitors. Not to mention the direct commercial effect, expressed in the fact that each new Client, on average, a few weeks earlier began to use our services and pay money for it. These events are described in more detail below, in the chapter "Holy War of Merchants and Techies".
The foundation of the success of my current business rests on the implementation of three crazy ideas:
- reorientation from process consulting to building professional turnkey sales departments. At the same time, the volume of work under the contract, as well as the cost of the contract, increased tenfold;
- active regional expansion, which we started when our only office was still not really making ends meet;
- my first book is Building a Sales Team, which I wrote in 2005. In the same year, it was published by the publishing house "Piter". The book proved to be very popular from the very beginning, and work on the following books went much easier. But at the end of 2004, the very idea that I would now write a book and then submit the manuscript to the best Russian publishing house of business literature scared me to death.
All of these ideas at the time they were invented seemed absolutely incredible. And yet, the key factor in the success of enterprises was the implementation of these crazy ideas.
Growth through business transformation
Sometimes it happens that the chosen business model is untenable. Or rests on fatal restrictions that do not allow further increase in turnover and income. To get out of this situation, you will have to figure out how to change your business. Often such a change will mean that you, while continuing to operate within the same Company and relying mainly on the same team of employees, close the old business and open a new one on the go. Businesses in the service sector are inherently predisposed to this. It is somewhat similar to a castle in the air, brought to life by a wizard's spell. It is clear that the wizard has complete power over his creation, at any time he can change its layout and appearance. Or even with a wave of the hand, dissolve one castle in the air and create a new one in its place. Of course, the experience and qualifications of the wizard are manifested in the fact that the feudal lords and servants continue to live in the castle as if nothing had happened, without even noticing the substitution. If the magic is done by an inexperienced caster, the consequences for the inhabitants of the castle can be extremely unpleasant.
One way or another, I repeatedly had to become a wizard. And as far as I can tell, I wasn't that bad. As a result of the changes I made, the team was always preserved, plus new employees were hired. And turnover, income and the number of customers grew.
So, in my first business, the first miraculous transformation was the use of the Relcom network node to deploy the Client-Bank system. It seemed that just yesterday no one could have come up with the stupid idea to conduct financial transactions for serious amounts through some lousy e-mail. And suddenly - a miracle! - it turns out that this is absolutely normal, very prompt, quite safe and very convenient. Dozens and hundreds of Clients come to us for service, and our business is growing by leaps and bounds. The second miraculous transformation was the transition from providing Relcom network services offline to providing online access to the Internet.
The most miraculous transformation in the history of Rusnet was the first. Then the Company, which was supposed to organize communication with remote divisions for a few corporate customers, suddenly turned into an Internet provider. Which provided high-quality high-speed Internet access for large, medium and even small organizations. Moreover, the magic was done by just ... changing the price list.
Finally, in the current business, I have had to use my wizard powers multiple times. We started out as a small company that organized open seminars on time management, personal finance and investments. Our Clients were individuals, the geography of sales was small, and the turnover was negligible. Now the Company specializes in consulting services. The geography of our projects, in addition to Russia and all the countries of the former Soviet Union, extends from the UK, the Czech Republic, Poland, Israel and Turkey to China and South Korea. And the average monthly income of key employees exceeds the turnover of the Company in the first period of its development, that is, before the first magical transformation.
Now tell me, where else, besides the service sector, does an entrepreneur simply have to be a magician?
Organization of service production and useful bureaucracy
One of the tasks, the solution of which is of key importance for the successful development of a business, is the organization of the production of services in your Company. The essence of the business in the service sector is that your employees perform certain work for the Clients. Thus, specialists who can perform these works are the main production resource of the Company. Of course, the efforts of specialists alone are not always enough to provide the required services. Often, equipment, consumables, infrastructure, software, etc. are also needed to carry out the work. But without specialists, all this is dead and useless. Therefore, in order to provide the Clients with the necessary services, it is necessary first of all to organize the work of the relevant specialists. And before that - to attract them from the labor market and provide them with proper professional training.
As long as there are few orders, your specialists can do their job quite acceptable. But when the number of orders grows, the number of failures in customer service and failures in obligations to them begins to grow even faster. You are, of course, trying to improve customer service by hiring additional employees. But this does not help, because the problem is largely generated not so much by the lack of qualified specialists as by the useless organization of their work. And according to the second law of social thermodynamics, investing in a mess increases the mess.
The key principle of organizing the production of services is: it is necessary to completely separate sales and production as early as possible. Some employees - merchants - should be engaged in search and attraction of Clients. And others - the fulfillment of obligations to the Clients in accordance with the contracts concluded by the merchants. The division of duties leads to order, control, and an increase in the intensity of workload of employees. In addition, it is much easier to attract from the labor market and train narrower specialists.
On the contrary, the attempt to assign several fundamentally different functions to the same employees leads to problems, difficulties and disasters. For example, in many printing companies it is taken for granted that sales managers personally monitor the execution of their orders. That is, first they must negotiate with the Client and agree that he orders their Company to print an advertising booklet. Then they work long and hard with the Client to discuss the design and content of the booklet. In the process, they constantly stand over the soul of the designers and make them work. Finally, when everything is finally agreed, the merchant goes to production. And he controls the printers for several days until the order is fully completed.
At meetings with me, the leaders of such Companies complain that they have poor sales. There are few good sales managers. And even those most of the time, instead of negotiating, are in production. And at the same time, it is almost impossible to find additional specialists in the sales department in the labor market who would have the necessary work experience. And even if you manage to hire a new promising employee, it will take years for him to train until he reaches the desired qualification.
It is obvious that business owners have created problems for themselves. It would be much more efficient to divide the duties that previously had to be performed in an incomprehensible way by unfortunate managers into two blocks of work. It is necessary to appoint production administrators (in fact, project managers) who would provide consolidated control over the execution of orders. In order to avoid the effect of a damaged phone, production administrators must personally be present together with merchants at the final stage of negotiations with Clients, when an order is discussed and specified. After that, they directly contact the Client until the order is executed, the Client is satisfied and the corresponding supporting document is signed. And merchants in this case can fully focus on sales. If a merchant wants to trace the stage of execution of a particular order he has attracted, it is enough for him to ask the production administrator about this. Practice shows that two or three production administrators can cope with orders that are attracted by a whole crowd of merchants.
Successful interaction between sales and production departments is greatly facilitated by a useful bureaucracy. Many entrepreneurs remember from Soviet times that bureaucracy is evil. That this is a terrible beast that makes people spend a lot of time and effort on useless pieces of paper, instead of doing useful things.
But once the bureaucracy was an outstanding invention of human civilization. It reached its peak when it was used to control geographically dispersed empires.
And in business management, a reasonable bureaucracy can bring very tangible benefits. Vladimir Konstantinovich Tarasov, when analyzing the levels of enterprise management, specifically highlights the second - "instructive" - level. Which, from the point of view of Vladimir Tarasov, has obvious advantages over the first - "administrative" - level.
In classical personal administrative management, in order to influence an employee, the manager must spend time and effort. Moreover, they need to be spent every time - with each subsequent impact. At the same time, with instructive influence, the time and effort of the leader are mainly spent at the very beginning - on the development of an appropriate order, instruction or standards. In some cases, the manager will also have to explain the order or instruction. Or train employees in the correct work according to the standards. But in the future, the management impact is provided by the document itself, which greatly saves the time and effort of the manager. At the same time, the principle applies: “A living person defeats a dead instruction. But a living instruction defeats a living person.”
No more or less successful business can do without some amount of reasonable bureaucracy. First of all, it is necessary to organize a clear, regular and systematic accounting of finances. It is not bad if, before creating an enterprise, you draw up its business plan and financial scheme in advance. However, I know examples when quite successful businesses were created without preliminary calculation. I myself have had occasion to open new companies or launch new lines of business without a detailed business plan. However, a business that does not properly organize the current accounting of all financial transactions, income, expenses and obligations payments will definitely not see a bright future. So setting up current financial management is a matter of the Company's survival.
Part of the monthly financial reports within the framework of the operational financial management of the enterprise may be the calculation of piecework wages. And this mechanism is extremely interesting. Efficient piecework systems provide invaluable assistance in business management and development. The general principle of building such systems is that key indicators are identified in the work of each employee and division of the Company. Their achievement to the greatest extent determines the real contribution that these employees or departments make to the success of the business as a whole. It is important that these indicators can be monitored objectively. That is, they should be calculated on the basis of official documents that are difficult to forge. Thus, the development of piecework systems in many cases will require you to introduce additional bureaucracy.
But the gains from the massive use of such wage systems can be enormous. If key indicators are not highlighted, employees do not clearly understand where they should focus their efforts in the first place. And managers have to constantly tell what employees should do. No orders - no work. If the employee knows what results he himself should provide with his actions and what results are expected from his unit, he directs all his efforts to achieve the desired results. In the end, everyone wins: the income of employees and the profit of the Company grow simultaneously. At the same time, managers spend significantly less time and effort on the administrative management of employees. In one of the following chapters of this book, I will talk in detail about the development of piecework wage systems for various categories of employees. And I will illustrate the story with examples from practice.
One of the most important points where bureaucracy can bring great benefits to your business is the effective building of interaction between various departments of the Company. This is especially true of the interaction between commercial and technical departments. When there are few orders, all issues can be well resolved in the process of personal communication. But when orders become larger, delays and failures in their implementation inevitably occur. The situation gradually turns into a state of complete chaos. Two weeks ago, one technical department specialist swore and swore that the equipment for the new Client had been purchased and that it would soon be possible to connect it. A week ago, another specialist said that the equipment had arrived and that within two or three days a team of installers would go to the Client. And today they are looking at you like two sheep at a new gate. And they claim that no equipment has arrived. And they hear about this Client for the first time.
It is clear that you just want to kill them. But that won't solve the problem. To solve it, it is necessary to build the interaction between the commercial and technical departments on the basis of reasonable bureaucracy.
Example
After a number of similar incidents, the Rusnet Company made a strategic management decision: the technical department no longer accepts any applications orally. Instead, a standard application form was developed. From that moment, the interaction of merchants with techies was built exclusively on the basis of written applications. At the same time, the application was not simply transferred to the technical department. Firstly, a copy of it must remain with the merchant without fail. Secondly, all applications were taken into account in the register, which was on the table of the technical director. First, the register was filled in by the one who submitted the application to the technical department: he indicated the name, date and signature. And in the next column of the same line, the employee of the technical department who accepted the application for direct execution entered his name, date and signature. After that, each transfer of the application from employee to employee - both within the technical department and between departments - was accompanied by a similar new entry in the registry. When work on the order was completed, this was again noted in the register. Thus, it was immediately clear from it which applications had not yet been completed, who was the last to deal with them, and how long ago it was.
Later, when the VIP program was launched in Rusnet, it was decided that the VIP program questionnaire would become the second acceptable application form to be submitted to the technical department. It was much easier to do than to rewrite all the data from the VIP profile into the application of the technical department every time. As you can see, bureaucracy is introduced in the Company for the convenience of employees and managers, and not vice versa.
Here is what a typical application form looks like in Rusnet Company:
An identification number______
Opening date______
Manager______
Number of contract______
Client name
Actual address
Legal address
Contact Information
Radio connection ____
Dedicated line connection______
Connecting to a transport network node_____
Satellite connection_____
Installing the Media Server_____
Legal IP address_____
IP telephony______
Installation of the client's local network ______
Configuring a Windows-Based Router_____
Allocating IP subnets______Operations with a client
And here is what one page from the register of the technical department looks like:
Financial management
Financial management is important for any business. But its importance for the service business cannot be overestimated. Not many wizards are capable of building a castle in the air. The trick is to make it possible to live in the castle. And what’s more, to ensure that electricity, plumbing and sewerage work without interruption.
By creating your enterprise, you can imagine brilliant prospects and dizzying success as much as you like. But only a real picture of income and expenses, profits and losses of the business shows how your bold plans are being implemented.
In general, managers and business owners are extremely prone to self-deception. Many of them like to embellish reality and portray the state of affairs in their Company much better than it is. And only the dry language of numbers reflects the true reality.
What financial indicators should the head of a business in the service sector focus on in the first place?
First of all, you should find out what the company is expected to have monthly fixed costs. This includes office rent, employee salaries, etc. All these expenses must be borne even in the event that during the month not a single transaction was concluded, not a single sale was made and the Company did not earn a penny. Suppose, after calculations, it turned out that the monthly fixed costs of your business amount to 270 thousand rubles. For example, consider the situation of the initial stage of business development. After all, if the current financial management is not put in place in a timely manner, the business is unlikely to be able to develop to a more serious level.
The next thing to calculate is the break-even point of the business (aka the waterline point). To do this, you need to understand what part of the payments received from the Clients goes to the variable costs associated with the provision of services to your Clients. Let's say you estimate that the share of variable costs in paying the Client is 70%. This means that out of every 100 thousand received from the Client, 70 thousand goes to various variable costs. Including the piece-rate part of the payment of your employees. And the remaining 30%, that is, 30 thousand, go to the formation of gross profit.
The business reaches the break-even point at such a turnover, when the size of the gross profit for the month is equal to the size of the monthly fixed costs. In this case, the net profit is zero. In other words, the business makes neither profit nor loss. At what turnover in our example will the break-even point be reached? It is necessary to divide 270 thousand by 30%. It turns out that with a turnover of 900 thousand rubles a month, this business reaches the break-even point. If the turnover is lower, the business will be unprofitable. If the turnover is higher, the business will be profitable.
Then you need to define sales plans for the month. For example, the Company may set a starting sales plan of 1.5 million rubles per month. After that, you can oblige the financiers to send you a report by SMS every morning, in which they would indicate the turnover from the beginning of the month, the planned turnover for the current day and the percentage of achievement of the plan. In the middle of the month, the report might look like this: "Turnover / plan: 780,000/750,000/104%". It looks like things aren't going too badly at the moment, and your business is 4% ahead of your target growth rate.
Another powerful tool for operational financial management can be monitoring the implementation of the plan for the year. If you have established an annual plan and painted how it is formed by months, your financiers can calculate every day how the real turnover from the beginning of the year compares with the planned turnover for the current day. If your business has been on the market for more than a year, you can ask your financiers to compare the current day's turnover with the previous year's turnover on the same day. This report can also be sent to you via SMS. For example: “Turnover / plan for the year: 17,875,300/19,188,000/93%. Last year: 14,178,520/126%.” It turns out that while your turnover is not growing fast enough for the plan for the year to be fully implemented at such a rate. But since the beginning of the year, your turnover is 26% higher than in the same period last year. So you still have some reasons for optimism.
There are other financial parameters of the business that need to be monitored periodically. Among them is the size of turnover and, more importantly, net profit per employee working in the Company. Turnover itself is not so important. Only the big picture matters: turnover, costs and result in the form of profit or loss. So, you can calculate the average amount of net profit per month for each employee of your Company. Let's say at the moment this figure is 30 thousand rubles a month. On the one hand, a little. On the other hand, if at the same time the number of employees is increased by 50 people, the net profit of the business will increase by 1.5 million rubles per month. Or will it not increase? That's the point. When expanding the business and increasing the staff, you need to constantly monitor how the size of net profit per employee is changing. If it remains unchanged or grows, this means that the efficiency of profit generation by each employee at least does not decrease with an increase in the size of the enterprise. And then it increases. Therefore, extensive business development can provide a positive financial result. If net profit drops significantly when hiring new employees, perhaps the increase in staff was not such a good idea.
A similar parameter is the ratio of net profit to the Company's turnover. If this share grows, then the efficiency of the business increases. If, with an increase in turnover, the share of net profit in it decreases, then costs increase faster than income. Although, if the turnover of your Company grows tenfold, and the share of net profit in turnover decreases only two times, it is possible that the result will suit you completely.
Another interesting parameter is the employee's personal effectiveness since the beginning of the year. For the majority of employees directly influencing the formation of the Company's profit, it is possible to calculate the level of personal results at which this employee becomes self-sustaining. If the results for the month do not reach this level, then the employee receives more from the business than he gives to him. And vice versa, employees whose personal results consistently, from month to month exceed the level of personal self-sufficiency, make the main contribution to the formation of the Company's profit. Usually, the level of self-sufficiency is directly related to the conditions of remuneration. For example, in my current company, it is believed that an expert whose fees per month are twice or more than the fixed salary level is considered to contribute to the formation of business profits. If we take the self-sufficiency rate as 100%, the financiers can provide you with data on a monthly basis about what each of the employees' personal performance has been since the beginning of the year. Obviously, an employee with a personal effectiveness of 450% since the beginning of the year is much more valuable to the Company than an employee with a personal effectiveness of 35%.
Since we are talking about the fact that the calculation of personal effectiveness is closely related to the level of remuneration of a given employee, it would be useful to control one more financial parameter. Namely, the average income of an employee of the Company. Calculating it is very simple: you need to divide the total wage bill by the number of employees working in your Company. You can also calculate the average salary of a sales manager, programmer, etc. Of course, not only these parameters are interesting, but also the dynamics of their changes.
The scourge of many Companies offering services is financial instability. Every month you need to attract new Clients and generate new sales, just to make ends meet. And if you fail to make enough new sales, the business goes into the red. Unfortunately, most business owners do not have solid financial reserves to compensate for the losses of the enterprise from their own pocket for several months in a row. But many Companies are also subject to very noticeable seasonal declines in sales. What will happen if bad luck is added to the seasonal recession? Or if a fairly long force majeure occurs, which is caused by external circumstances that are beyond the reasonable control of the owner of the Company? No matter how successful a business was before, as a result of such events, it can disappear from the face of the earth. And with a very high probability. So, for example, in the winter of 2008/2009, almost all training companies perished in Voronezh.
However, there is a way out of this situation. You must act on the principle of "he who is forewarned is forearmed." It is necessary to calculate what maximum losses you can incur based on the results of the month. Typically, the amount of losses corresponds to the size of the fixed costs of the business. Indeed, if your Company has not made a single sale in a month, most likely, the losses will be maximum. Unless, of course, you are in the habit of entering into contracts with Clients at a loss. And then you need to multiply the amount of the maximum possible losses for the month by two or three. This is how you calculate the size of the financial "airbag" for your business. In the example described just above, the fixed costs of the business per month are 270 thousand rubles. This means that the size of the financial "airbag" for him will be from 540 thousand to 810 thousand rubles.
After that, your task is to accumulate this amount as soon as possible and place it on two or three deposits in different fairly reliable banks. Usually, funds for the financial "airbag" are kept on personal deposits of the owner (or owners) of the business. Therefore, the Company can get access to them only with the direct participation of the owner.
The presence of a financial "airbag" will provide you with a restful sleep. Even if a fatal force majeure comes, you will still have the means to support the fulfillment of all obligations within two or three months. In the meantime, you can take some action to get your business out of a tailspin. Perhaps significantly reorient the business if the market has changed a lot. The advantage of the service sector is that, if necessary, many Companies are able to radically change the specifics of their activities, and very quickly. If, however, there are no further prospects for the business, you, in any case, will be able to close it in a civilized manner, having fully fulfilled your obligations both to your employees and to counterparties. By the way, in real life, even under difficult circumstances, sales rarely drop to zero. This means that even in the most difficult months your business will earn at least partially covering its costs. And consequently, "airbags" may be enough not for two or three, but for four or six months.
In conclusion, let me remind you that some cyclicality is inherent in any business. Even if it develops and grows, it hardly looks like a continuous forward movement without delays and temporary drops. Wherever a business is heading - up or down - it does not move in a straight line, but along a sinusoid. Periods of growth are inevitably followed by periods of decline. And vice versa. The important thing is that you can benefit from both ups and downs. When the business is on the rise, you expand the geography of your activities, increase the number of employees and earn money. At the same time, the recession period provides an excellent opportunity to optimize business processes and cut costs in every possible way. It is the effective sequestration of the budget and the liquidation of inefficient business components during the next downturn that lay the foundation for the next upsurge not only to increase turnover, but also the rate of return to remain very attractive.
Hunting for clients
Here I would like to focus on an issue that is a serious stumbling block for Companies offering rather complex services or turnkey solutions to Clients. Suppose the complexity of such services lies in their technical side. For example, the Company specializes in the production and promotion of shopping sites on the Internet. Or we are talking about building an enterprise power supply network, or installing video surveillance systems, or introducing serious IT products related to the automation of banking activities. And so on, and so on, and so on... In all these cases, business owners are experiencing serious difficulties in finding the right employees for the sales department. On the one hand, such a merchant must have considerable sales experience and extensive negotiating skills with corporate customers. On the other hand, he must have good knowledge in his subject area. For example, in software products for banking automation. Or in the specifics of video surveillance systems and enterprise security. Since you will have to negotiate with the leading technical specialists of potential customers, it is necessary that the sales manager understands all issues as well as these specialists. That is, we need people who are both experienced, professional negotiators and have the technical specifics at the level of the best technical specialists. And, let me remind you, we are talking about a rather narrow industry. Where can you find such geniuses?
The recruitment approach I just outlined is the generalist approach. It is clear enough that he has the right to life. If we really manage to recruit professionals in the sales department who are strong in both the commercial and technical fields, we can expect decent results from them. The problem is that there is nowhere to take such people. Moreover, attempts to form a team based on such an approach can lead to some consequences that are not obvious at first glance. Extremely detrimental to business.
It is almost impossible to find ready-made generalists in the labor market. The only source of specialists who not only have good experience in negotiations and sales in your area, but are also perfectly familiar with the required technical specifics, are competing companies. But it is hardly wise to focus on the employees of your competitors as the main source of personnel for the sales department. Why would a qualified merchant from a competing Company go to work with you? It is clear that he will have to be interested in money. At the same time, by hiring for you, he betrays the Company in which he used to work. Not just leaving the business, but heading straight for his worst enemies. That is, in fact, we are talking about Judas, whom you are trying to buy for 30 pieces of silver. Let's say it starts working for you. But what kind of loyalty on his part can you count on? Today you bought him for money and he moved to your Company, dragging his client base. And tomorrow someone will offer him 33 pieces of silver. And he will leave for a new place of work, taking with him not only his own, but also your client base.
Of course, there are times when a professional is looking for a job in the same market where he worked for the previous few years. Since the Company, in which he previously worked, for reasons beyond his control, ceased operations. Yes, quite qualified and trained employees come out of such people. But such situations rarely occur. And year after year, it is unlikely that you will be able to form a sales department exclusively from experienced employees who came to you from collapsed competitor companies.
This means that most often you will not be able to find professionals of the required qualification in the labor market. The maximum that you can find is more or less suitable human material, from which you yourself will have to make such professionals. And it won't be easy. Professional training and polishing of skills in the field of negotiations and sales only at the initial stage will take several months. If employees also need to be trained in technical specifics, it will take much more time. Perhaps a year, or even two. If you rely on your sales managers to be both qualified specialists in both the commercial and technical fields, they are unlikely to be able to successfully conduct complex negotiations with Clients in the first six months or a year of work. Then it is not entirely clear how they will manage to survive and stay in your team. It is to be expected that most of the merchants you have hired will not be able to survive such a long adaptation period. They will start to scatter in a few months. Long before they acquire the qualifications to carry out serious negotiations without problems.
As a result, you will have to constantly select a significant number of candidates in the labor market. Spend time and energy on their training, as well as financial resources for salaries. The vast majority of these candidates will leave your Company long before they reach the required qualifications. So time, effort and money will be wasted.
And even when a few surviving candidates in a year and a half or two fully acquire the necessary qualifications and reach the proper level of negotiating with Clients, the problems will not end. As soon as the sales manager begins to really understand the technical specifics, he loses the desire to conduct routine commercial work. You will not wait for active study of potential Clients, tens and hundreds of cold calls from him. In addition, such strong universal specialists, to put it mildly, do not suffer from an excess of loyalty. They understand that they are extremely scarce in the labor market. As a result, their selfishness progresses, often aggravated by star disease. The matter can reach both subversive actions and conspiracies. Up to an attempt to move to competitors along with several other employees. Or to the creation of your own small business, which, in terms of the specifics of its activity, is like two drops like yours.
The described approach to the search for employees is the result of an implicit managerial error. The business owner assumes that employees should conduct sales in much the same way as he did himself. But at the initial stage of the Company's work, the majority of owners involuntarily have to be generalists: both conduct negotiations with Clients and understand the technical specifics thoroughly. So the owner thinks: since he negotiates in this way and it brings good results, then the sales department employees should work according to the same scheme. But in fact, one should think: is it really worth it for a business owner to strive for five people like him to work in his sales department? The most likely outcome of this situation is that soon five new Companies will be formed instead of one sales department.
In my opinion, it is much more efficient and more promising to build a sales department based on the principle of narrow specialization. Let the merchants negotiate with the Clients, and let the consideration and resolution of technical issues be left to technical specialists. In this case, sales managers should know the specifics of their Company's activities not broadly and not deeply, but firmly. That is, they should know well what key points related to the specifics of your services are most often of interest to Clients during negotiations. Your businessmen must really understand what they are talking about. But as soon as negotiations enter the realm of technical nuances, sales managers must immediately involve technical specialists.
Moreover, such sales managers do not have to conduct key negotiations with Clients themselves. They must necessarily invite people who have serious experience in such negotiations and who are fairly well versed in technical specifics. That is, either sales managers or technical experts. Or both of them. With such an organization of work, the minimum self-sufficient unit that is able to effectively conduct technically complex negotiations with Clients is a negotiation team of two people. One of them is a sales manager, an employee of the commercial department. And the other is a leading technical specialist, an employee of the technical department. At the same time, none of them can successfully attract Clients alone. The sales manager is engaged in mass commercial work, establishes contact with key persons of the Client, builds relationships, collects information, conducts preliminary negotiations. But he does not understand the technical side of the matter to the extent that he can effectively identify the needs of the Client, make technically complex proposals and successfully conduct key negotiations. At the same time, the technical specialist does not know how to actively attract Clients, make "cold" calls, use special technologies to reach large corporate customers and work out the decision-making center.
Wherever, to successfully achieve a result, it is required to involve several specialists of different profiles on the basis of the division of labor, it is possible to build a sustainable business system. Thanks to the narrow specialization and proper organization of the interaction of such specialists, the reliability of the business and control over it are ensured. Focusing on generalists, who completely perform an autonomous block of work, entails dependence on specific specialists, confusion, vacillation and self-will, lack of control over the business and constant attempts to take it away.
In addition - and this is extremely important - the personnel from which you plan to make narrow professionals are easier to find and hire on the labor market. They are cheaper, much more loyal, and their qualifications can be brought to an acceptable level in just a few months.
Interestingly, when building a sales system based on a narrow specialization, new sales managers can provide your Company with additional results from the first days and weeks of work. To do this, they do not even need to be able to sell themselves. In order for a sales manager to be useful to the Company, it is enough for him to learn how to make lists of potential Clients, contact key customers (for example, using cold calls), establish personal contact with them and arrange meetings. His further task is to hold the first meetings with key persons of the customer, collect information about the customer company and enter it into the appropriate form. For example, to the Client's Questionnaire, the Passport of a retail outlet or the Technical Passport of an object. At the same time, the merchant must not destroy the reputation of the Company in the eyes of the Clients.
Then, based on the completed forms, sales managers analyze the information and decide which of the Clients is promising for serious study and which is not. Meetings are scheduled with prospective Clients, at which both the sales manager, who initially worked on this Client, and an experienced negotiator are present. The latter will conduct key negotiations and "squeeze" the deal. This experienced negotiator can be either a sales manager or one of the Company's leading technical experts. For example, the head of the production department, the chief engineer or their deputies. In most cases, it is necessary that an experienced negotiator personally participate in the negotiations, starting from the stage of identifying the needs of the Clients. Then he prepares a technical specification, based on the interests and objectives of each specific Client. Then the same negotiation team presents the Company's proposal to the Client. After agreeing on the technical nuances, the discussion of financial conditions begins. An experienced negotiator “presses” the deal, shakes hands with the Client and signs the contract. And sales managers are gradually learning how to conduct key negotiations. And they are increasingly mastering the technical specifics of their Company's activities.
And the best part is that an equal number of sales managers and experienced negotiators are not required to effectively negotiate this scheme. In contrast, one experienced negotiator, whether it be a sales manager or a lead technical officer, can be involved in all key negotiations and close deals for three to five sales reps. So, if there is at least one person in your Company who is able to successfully conduct serious negotiations with Clients, this is already enough to establish the work of a commercial department of five people.
Expert reputation and personal brand system
Without exception, all businesses in the service sector have an interesting built-in ability to stand out from the competition. Or even take a unique, exclusive position in the market.
The fact is that services are always provided by people. And people are not the same. And they differ not only in age, gender and appearance, but also in personal, and most importantly, professional qualities. It is not surprising that the qualifications of a strong professional are valued higher, his work is paid more. And at the same time, it is more in demand than a similar work of an unknown middle peasant.
It is known that some restaurants are trying to break out of the general row, focusing the attention of visitors on the fact that they have an outstanding chef from distant countries. However, almost any business can use a similar way to strengthen its position in the market. The trouble is that most managers and owners of enterprises operating in the service sector do not understand at all what a powerful marketing tool is coming into their hands.
Let's say your Company specializes in the installation and turnkey implementation of various software products. First of all - all kinds of software solutions based on 1C. There are dozens, if not hundreds, of such 1C: franchisees in your region. The business is very competitive. For each Client and each contract, several Companies fight among themselves at once. Your income is not so great, but they get a lot of sweat and a lot of blood.
Would you like the Clients to choose yours among other equal offers in most cases and strive to cooperate with you? And what about the fact that many serious Clients themselves turn to you? So that they have good reasons to try to negotiate with you, despite dozens of alternative suppliers? At the same time, it is quite likely that Clients not only from your city, but also from many other regions will wish to work with you. Although they have a lot of their own 1C: franchisees in the city, with whom it is probably easier and faster to negotiate. And yet they will seek cooperation with your company. So would you like that?
Of course, I would like to. Who doesn't want this?
Now imagine that a well-known expert works for your Company. A recognized specialist in solving a certain range of tasks, one of the best professionals in his industry. He has books, expert articles, speeches at regional and federal conferences. Plus, there is an impressive list of completed projects. It is not surprising that in this situation, many Clients from all over Russia and from the CIS countries will seek cooperation with you!
At the same time, the services of any serious expert are exclusive in their essence. After all, they are given special value by the experience and qualifications of this particular specialist. Since there is no other such expert with exactly the same experience and 100% similar qualifications in nature, each expert is unique. It makes no sense to try to decide which of the prominent American financiers is better, stronger or more qualified - George Soros or Warren Buffett. Each of them is strong, professional, has a wealth of experience. And each deed - the results of the funds they manage - has proved its highest qualification. The question of whose qualifications is higher, as well as the question of whose experience is richer, has no answer. One experience does not compete with another, one qualification does not contradict another. Both George Soros and Warren Buffett are absolutely unique as financial market professionals. The company, headed by George Soros, has an absolutely exclusive position in the market. Just like the Company, which is headed by Warren Buffett. Therefore, it is pointless to choose between them. On the contrary, it is worth drawing useful lessons from both the Soros experience and the Buffett experience.
So, you would like to provide your Company with a similar exclusive position in the market. And we have already found out that it is quite realistic to take it. All it takes is to hire one or more highly qualified experts widely known in your industry.
The last step remains. If the strategic success of your business and its exclusive position in the market depend on the presence of recognized experts in the team, why not create them yourself?
To begin with, you must clearly understand: it will not be possible to portray yourself as an expert. You really need to be an expert, otherwise nothing will work. However, for strong professional practitioners, this limitation is not so significant. I think that any specialist with many years of experience in solving complex problems inevitably becomes a good expert in his field. There is even a special concept - the experience of extremum. The more extreme experience you have, that is, the more serious tasks you solve and the more “hemorrhoids” you encounter, the faster your qualification as an expert grows. At the same time, many of those who try to asceticize in the role of well-known experts are theorists who have very little real practical experience. All the books and articles that they have written consist of solid common truths. It is possible to crawl into this gap between expert theorists and professional practitioners who do not advertise their experience and achievements in order to develop their expert reputation and win a unique position in the market.
The next question is of major strategic importance: who will we promote as experts? In some Companies, the director, who is also the owner, personally participates not only in negotiations with Clients, but also in the provision of services. Or in the implementation of projects that the Company carries out to order. In other Companies, the owner is not directly involved in production activities. That is, it does not personally perform the services paid by the Clients. In some cases, he may even deliberately distance himself from it. For example, it would be strange if the owner of a cleaning company washed the windows himself. Moreover, he constantly performed a certain amount of work on washing windows and mopping floors as part of the current customer service.
If the owner is also the leading technical expert of the Company - or one of them - it makes sense to promote him as a personal brand of the Company. The fact is that you will have to invest in the development of a personal brand for several years before the first fairly tangible results appear. If you promote one of the hired technicians, the outcome is easy to predict. He will inevitably leave you, and then profitably use the personal brand created thanks to your efforts to find a new, much higher paying job. Or he will try to open his own business, very similar to yours. And with this, he will not have problems, because all the work to promote services has been done in advance at the expense of your Company. The flow of Clients who seek to work with him, as one of the recognized experts in your industry, is practically guaranteed to him. But the owner will not run away from the Company he owns, he will not go anywhere.
The style of promoting a personal brand can also be different.
In one case, you emphasize the exceptional personal qualifications of a key expert. And what it is based on is not deciphered. Probably, the point is in experience, and in an outstanding mind, and in innate talent, and in a favorable arrangement of stars. Be that as it may, your Expert Advisor is unique. There is no other like it and there cannot be! Such a scheme is good if you need to sell the services of this particular expert more often and more. For example, film actors and pop stars are promoted according to this scheme. However, it is clear that sales opportunities will be severely limited. Because the time that your only star can devote to working on projects is not infinite. The business turnover will also have a significant limitation, determined by the time that your star expert has worked in a month, multiplied by the hourly or daily rate of this expert. Moreover, we note that the rates of business experts and the most qualified technical specialists are far from the fees of Elton John, Madonna or Shakira.
Thus, the promotion of a single star strategically leads to serious restrictions on the possible increase in turnover and the pace of business development.
The opposite approach - technological - is based on the fact that some exclusive technology developed by a leading expert is being promoted. His experience and qualifications are still positioned as absolutely unique. But now, thanks to technology, they can be available to a much wider range of customers. The task of the chief expert is to improve and implement the technology. And also to train other specialists who will be able to effectively apply it when working with clients.
In one of the variants of the technological approach, the chief expert - the author of technologies - develops a certain package of documents, which, with the help of the rest of the team's experts, is finalized and implemented in the businesses of numerous Customers. Or a patent is issued for an invention, the rights to use which are subsequently acquired by other Companies. Or the technology is embodied in the author's software product, which can then be replicated and sold to Customers, including retail (for example, Kaspersky Anti-Virus). Or a business system is being debugged, which is then sold to partners in finished form. It is on this principle that the franchising system works.
The main advantage of the technological approach is that the personal resource of time and effort of the leading expert is no longer a fundamental limitation for the growth and development of the business. The main difficulty, of course, lies in the fact that without the appropriate technology, licensed software or patent, this approach cannot be used.
Thus, the personal brand of the main star expert is worth developing if he is also the main owner of the business. But it is even more pleasant in this case to use a technological approach. And what if the main owner distances himself from participation in the development of services? Developing a personal brand for an expert who is employed by the Company may not be the best idea. If you don't have something at your disposal that would serve as a basis for applying a technological approach, it may be better to wait with the promotion of a personal brand. If the provision of services in your Company is built on the basis of a technological approach and the technology used is quite unique, then go ahead! You need to focus on promoting not just one expert, but a whole team of experts under the Company's common brand. At the same time, almost all key actions aimed at creating and developing such a personal-corporate brand should be carried out in collaboration. For example, if you publish a book about the technology you use and about your projects, several Company experts must be co-authors at once. But if one of the experts, even before starting work on the book, has established himself as a selfish, narcissistic, self-serving and not very loyal person, there is absolutely no point in aggravating his star fever by inviting him to the team of authors. But it is extremely useful for the main owner of the business to be among the co-authors. Ideally, his name on the cover should be first on the list.
So, it is advisable to promote the personal brand of the main owner of the business or a whole team of experts working under a single brand of the Company. Spending years of effort building up the personal brand of a single expert employed by a Company for Hire is risky and highly unwise. And in any case, the work will be long.
The creation and promotion of a personal brand can be built according to the following scheme.
To begin with, the expert or experts whom you are going to promote should write two or three articles on professional topics. At the same time, it's a good idea to download from the Internet or pick up some really strong and interesting articles related to the specifics of your business from the industry press. And evaluate whether the results of your experts' creativity correspond to the level of the best representatives of the genre. If during comparison it becomes obvious that the style demonstrated by your specialists is clumsy, and in terms of content there are only common places, perhaps you have not yet matured to promote a personal brand. If the content of the articles is interesting, but the style clearly needs improvement, it makes sense to involve a professional journalist. It is likely that with its help, technical specialists will be able to shake out quite sensible articles. And if even the first pen test of your experts looks good against the background of the found samples, this is an encouraging sign!
In any case, there are several topics that it makes sense to pay attention to when writing such articles. First, the reader may be interested in methods, concepts or technologies for solving some complex professional problems. Secondly, stories about cases from practice are always in demand. Especially if serious difficulties, problems and force majeure circumstances arose in the work. And if such articles are written in a popular style, they can be published in newspapers and general magazines. Also, articles on the topic of why your services and turnkey solutions are needed, what results can be expected from them, who will benefit from them and who will not, and, of course, what are their distinguishing features. Another very popular genre is the market review: a comparison of different suppliers with thoughtful professional analysis and comparison of the key characteristics of their offerings.
After your experts (perhaps with the help of journalists) have prepared some good stories, you can start to attach them to various media. At the same time, experts should not be allowed to relax: writing articles should become a habit for them. As a result, several new articles should be at your disposal every month. In the meantime, you need to allocate an employee who will constantly work on the placement of expert materials. And in general, over the promotion and development of the personal brand of your experts. Perhaps it will be your advertiser or marketing director. If no one has been involved in advertising and PR in the Company so far, it is possible that in order to promote a personal brand, a new employee will have to be hired.
The next step is to ensure that a few articles signed by your experts are published with the aim of having similar articles published on a regular basis. It is important to understand here that all newspapers and magazines are divided into advertising and information-analytical. Both those and others largely (or mostly) earn on advertising. The only difference is that advertising media can be 100% filled with ad units. There may not be a single article in the entire issue, and this is completely normal. But information and analytical publications operate on a different principle. They attract an audience by publishing quite interesting materials that can be read with pleasure. Some of these materials are indeed informational or analytical in nature. The other part is actually a hidden (or rather explicit) advertisement, written in the style of an information and analytical article. Such materials are placed on a commercial basis. And for their publication you have to pay according to the price list, in full measure. However, a significant part of the space of such a publication must be filled with analytical articles. Therefore, the editor must constantly look for authors who could write them. Moreover, they even pay royalties for these materials. In some journals, for example in some professional accounting publications, their amounts can be quite tangible. In others, for example, in management publications, the fees are small, purely formal. Thirdly, you will be given a fee in kind, that is, advertising space. One way or another, if the editors like your expert article, you will not only not be charged for its publication, but they can even pay an author's fee or provide you with advertising space.
Thus, the marketer should make a list of newspapers and magazines where you would be interested in publishing expert articles. If the central office of your Company is located in Moscow, it makes sense to contact professional industry publications in the first place. If the head office is located in the region, it all depends on the geography of your Clients. For example, if the Company is focused on servicing Clients exclusively within its city, you will have to communicate closely with various regional media. At the same time, there may not be a single professional publication dedicated to the work of your industry in the city. But some business newspapers and magazines of an informational and analytical nature may well be interested in your articles on popular topics. However, the biggest mistake that a marketer of a regional Company can make when creating a personal brand of its experts is to fully concentrate on working with regional media. Your leading specialist should be the main expert at the federal level, and even better - at the world level. And no less. “Chief specialist in oil exploration of the city of Uryupinsk” sounds ridiculous. So it doesn't matter where your head office is located - in Moscow, Volgograd or Uryupinsk. If you want to build a serious personal brand for your experts, you still have to communicate with the largest professional publications at the federal level.
After making a list, start talking to the media. You can limit yourself to sending a letter to each editorial office, attaching several articles to it. Would anyone like it? Of course, everything happens in life, but this cannot be called serious work on promoting a personal brand. It is much more effective after sending the letter to call, contact the key employee and establish personal contact with him. Sometimes it makes sense to call first, discuss what exactly the editors of this publication are interested in, and only then send a letter. And most importantly, in order to strengthen personal relationships, it is imperative to meet with all the key people who make contact. In Moscow, people are so accustomed to resolving all issues by phone and e-mail that both the authors of articles and PR managers rarely come to the editorial offices of magazines. Many writers don't even know what the people they're trying to do business with look like. So far, the regions do not have such extremes. Meeting and chatting is the norm. So with all the media representatives with whom you would like to cooperate in your city, you should establish close personal contact. But the federal media should not be overlooked either. Firstly, nowadays there is not only a telephone, but also Skype. Secondly, after you have spoken on the phone with the staff of several editorial offices, it is time to plan a business trip to Moscow for a couple of days to meet with these people and make personal contact on a much more serious level.
During the conversation, be sure to emphasize that you would like to offer expert materials for publication, and not an advertising article that promotes the activities of your Company. Otherwise, all further communication with you will be continued by the sales department (or, as they usually call it, the advertising department) of the corresponding magazine.
In some cases, after some time, a newspaper or magazine will still want to publish one of your articles. In others, they will tell you that at the moment the materials you have proposed are not interesting for the publication. If you communicate with journalists only by e-mail, at this stage everything can easily end. If you have a good personal relationship with one of the key editorial staff, ask him what's the matter. Maybe the level of articles is no good? Or the level is not bad, but the subject does not fit the format of this magazine? Or does the style of the article not fit into the concept of the publication? Then a professional journalist can be hired to read several issues of the magazine from cover to cover and rewrite the article in a more appropriate style.
Finally, it may be that, from the point of view of the editors, the level of your Expert Advisors is not so bad. But the issues that are considered in the articles are not of interest to the journal at the moment. Then try the next move. Say that your experts can write articles on other topics. Let them send you a choice of several topics on which the editors would like to receive exclusive materials. You will show topics to your experts. And, if they have something to say, they will prepare a new article. In my practice, it happened more than once that some professional publication, which is quite specialized for our Company, initially did not want to take ready-made articles that we sent. But when we asked for topics that were of interest to the magazine at that time, the result was an article written especially for it - and a publication. And only then the cooperation went on knurled.
Of course, it is also very useful to post expert articles on the Internet. This can be done both on the corporate website of your Company and on the most popular specialized websites of your industry. Or on sites where professionals working in your industry or in companies like yours communicate. However, it should be taken into account that most professional media prefer to publish exclusive materials. Some of them will simply not accept an article if it has already been published somewhere. Especially if it is posted on the Internet and is freely available there. On the contrary, if the article first appeared in the next issue of the journal, and then was published on the website of this publication, God himself ordered you to publish it on your website. Of course, with an indication that this material was published in such and such a number of such and such a journal. And with a link to the source - your article posted on his website.
The general sequence of publication of expert materials is as follows.
- First, your experts write the article.
- If an article has been published in a journal that focuses exclusively on exclusives, its further fate will depend on the conditions of publication in this edition. In some cases, you will have to limit yourself to a link to the journal's website. You may also be able to later include the text of the article in your book. Unless, of course, you write and publish books. You will agree on this without any problems. But, if the journal strictly monitors compliance with the terms of the author's agreement, the article should not appear in any other media, and even more so on the Internet. Although in some cases posting on the Web with a link to the original source, that is, to the journal's website, is still possible.
If you were unable to attach an article to any of the professional media that work only with exclusive materials, or the journal in which it was published did not severely restrict your further rights, you can place the article further.
- A At the next stage, the article can be offered to publications that are not so scrupulous about exclusivity.
- After negotiations with all newspapers and magazines in which you could publish this article have been carried out and the results (consent to publication or refusal) have been received, proceed to posting the article on the Internet. In this case, it is most profitable to first place it on one or more sites of the professional community in your industry. Or on one of the largest industry portals. Then you can publish the article on your website with a link to the source. However, something, but no one can take away the opportunity to place an article on your company's website.
Then you try to attach it to one of the publications that accept only exclusive materials that have not been published anywhere before.
Option: if the article is written on a topic ordered by some journal, you first of all try to agree on publication in it.
As a last resort, if your head office is located in the region and a significant part of the Clients is concentrated there, you can simply publish a few articles for money. It is possible that the cost of publishing an article in some of the regional business media of an information and analytical nature will not be so great. Perhaps somewhere you will be able to agree on the publication of expert materials in exchange for the services of your company.
After your experts have several published professional or expert articles, move on to the next stages of personal brand promotion. At the same time, work on articles cannot be stopped in any case. In a good way, it should go constantly. So that for many years every month several articles of your experts are published in various newspapers and magazines. Dozens and hundreds of published materials look much more impressive than two or three articles. In parallel, you can agree on the participation of your experts as speakers at exhibitions and conferences. In some cases, participation will be free of charge, if the organizers are really interested in the opportunity to involve your expert as one of the speakers. Sometimes you yourself will have to pay for the opportunity to organize such a performance. In my opinion, the presentation of experts within the program of an industry exhibition may be almost more important than the work at the booth. If our Company participates in any exhibition, we try to schedule two or three performances for each day. Of course, at different times in order to perform in front of a different composition of participants. And of course, on different topics to make it more interesting.
A great opportunity to promote your experts and train them for public speaking is to arrange expert seminars, as well as forums and conferences. The difference between these events is that an expert seminar usually lasts only a few hours (although it can be longer). It is attended by either one expert or several experts from the same Company - yours. At the same time, there are many different speakers at the conference representing completely different Companies. The mechanism of effective organization and holding of such events was perfectly described by Igor Mann. As he quite rightly points out, the main result of such events is completed questionnaires-reviews. Although if you manage to sell something right in the process of a seminar, conference or forum, that's even better. And the most important part of the event is breaks and coffee breaks.
If your leading expert (or several experts) often speaks at exhibitions, conferences and professional seminars, and his articles are regularly published in the regional and federal press, the result will be the strengthening of his personal brand. At the next stage, some newspapers and magazines will not only willingly publish your leader's expert articles, but will also be happy to interview him.
Another interesting point is the opportunity for your expert to be featured on radio and television. Here, too, there is a nuance: in some cases, radio stations can be worked out directionally. And go to the TV people by acquaintance. Or they should come to you themselves. If TV people call you and invite you to take part in the program, most likely everything will work out. If you yourself try to agree on something with them, nothing good will almost certainly come of it.
We should not forget about such an important tool for developing a personal brand as writing and publishing a book. I know Companies whose entire commercial success is based on one well-written and regularly reprinted book. So a single bestseller can be enough to build a strong personal brand. However, not everything is so simple. There are many who want to write a bestseller, but few succeed. A more or less practical book on business topics is likely to find its way into the publishing house. If the subject of the book that your experts can write is of a highly technical nature, you will have to publish it at your own expense. After that, the question arises of how to distribute the book so that it really helps and supports you in attracting Clients and increasing the reputation of your experts.
In any case, the difficulty is not in getting the book published. And that it should withstand the second, and most importantly, the third and subsequent reprints. Readers are not stupid. If you write another passing volume containing regular common truths or well-known data, there will be little sense. On average, the cycle of writing and publishing a book takes about a year. And then if the author has a fairly strong self-discipline, which is usually uncharacteristic for creative people. Should you get into it if you don't even know if the book eventually published will even be worth the paper it's printed on? Don't know. I think that if you do not have a strong writer's itch, an unbearable desire to write a book, then you do not need to get involved in this. In addition, you can check yourself on the articles. If there is objective evidence that your expert writing is among the best in the industry, why not consider a book? In the service industry, there is only one outstanding book that is like a bible to our business. This is David Meister's book Managing the Professional Services Firm. This truly outstanding work is not actually a book. In fact, this is a collection of articles that have been published in professional media for many years. The result is excellent. But all the other books by David Meister, in my personal opinion, are much weaker.
Before embarking on the promotion of a personal brand, it is important to consider one nuance. This work requires a significant investment of time and effort, serious professional experience and high qualifications. It is necessary to communicate intensively with a very large number of different media. However, the direct financial costs of this activity are not so great. But the results from it do not appear instantly. The first tangible results, expressed, among other things, in the growth of the flow of incoming requests from Clients, can be expected in two or three years after the start of systematic work in this direction. But subsequently the achieved results continue to develop and strengthen. And the reputation you have created can be used in the interests of business for decades.
Many owners of Companies frantically think about how to stand out from the competition and take a more or less stable position in the market. A promoted personal brand will allow your business to take not just a stable, but an exclusive position. With all the benefits that come with it.
Yes, this is not easy to achieve. Yes, it will take a lot of time, effort and nerves. Yes, this path is not for everyone. But my task is to tell you about what is effective. Not that it's easy.
Appendix. Goals of building a sales system
The importance of setting the right goals when building a sales force cannot be overemphasized. Most entrepreneurs, in principle, have no idea what a professional sales department is capable of, what tasks it can solve for a business, with what degree of reliability and guarantees.
It may seem paradoxical, but less than 3% of Russian Companies have professional sales departments (sales systems). And more than half of them are transnational corporations. No wonder Procter & Gamble or Coca-Cola have powerful sales systems. It is unfortunate that most domestic Companies do not have them.
Russian entrepreneurs are accustomed to having their sales department work like a prisoner in shackles. Most of the sales departments of the Companies they know are the same. As a result, all ideas about increasing sales are concentrated on how to optimally drag a heavy shot with your foot. Entrepreneurs think that a weak sales force moves at 300 meters per hour. And the strong one overcomes a whole kilometer in an hour. That the sales force can run (at a completely different pace) just doesn't occur to them.
A professional sales system is built to achieve three goals.
- Guaranteed sales. Your Company needs a certain amount of sales to make the business profitable. Plus some additional income for the current maneuver. The volume of sales required for this is called the level of guaranteed sales. Regardless of the season, market fluctuations and force majeure, your sales system should provide sales from guaranteed to average, high or exceptional. But the sales volume should not fall below the guaranteed level. No way. If so, the goal of guaranteed sales has been achieved.
- Independence from personnel (from two to four key persons). To check if this goal is being met, you need to line up in your mind all the people involved in sales. In turn: from the most important person for sales in the Company (maybe it's you) and further in descending order of importance. If the most important person for sales, like you, cannot be removed from the business without sales going “at the peak,” this is not a sales system, but nonsense.
In this case, the position of the most important person in business can be described as follows.
- A galley floats on the sea.
- Slaves row below. They are chained to benches.
- The captain is at the helm. Dressed in luxurious clothes, important. Rulit. His shackles are golden.
If the most important person can be removed from the chain, but the second most important person cannot, this means that the best businessmen will be able to go on vacation. In turn. Already good. But this is not our goal.
In a professional sales system, two to four key employees can be taken out of business at the same time. At the same time, sales will almost certainly decline. After all, we take the very best. But if the first goal - guaranteed sales - will still be fulfilled, then the goal of independence from personnel has also been achieved.
Checking if you have achieved this goal is very simple. When you feel you have a professional sales system in place, go on vacation with the right number of key employees. Abroad. For two weeks. Without cell phones. Upon returning, you will immediately see how successfully the goal of independence from personnel has been achieved.
- Planned increase in sales. Establishing guaranteed sales is a good goal. But it's not enough. The business must grow. This needs money. Therefore, for the development of the enterprise, sales must increase. Suppose you set a goal for the commercial department - to increase sales by 30% (or 50%) in six months. A professional sales system should be able to cope with any task you have (if it can be done at all). Simply on the basis of the fact that it is delivered. And if you are sure that any realistic task will be solved, then the goal of the planned increase in sales has been successfully achieved.
Now we have determined what results you can expect if you create a professional sales system. The next question on the agenda is how to build such a system. So, we came to the master plan for building a sales system.
In many countries of the world, the service business often played the role of a kind of engine for economic development and increasing the efficiency of social welfare. However, in our country, such mechanisms began to emerge only at the turn of the 19th-20th centuries, proceeding unevenly in different regions and everywhere acquiring considerable originality. During this period, various types of service production began to spread from historically established economic centers to medium and small cities, to poorly developed territories. Traditions that had been operating for centuries in the sphere of trade, domestic services, and transportation died out, and new principles and organizational forms of service were born.
Under these conditions, the entrepreneurial activity of the service sector could eventually become a significant factor in the development of the modern type of domestic economy. The subjects of service activity were sensitive to public demands, the need for the emergence of new types of services, the possibility of making a profit in a particular region of the country. A huge role here was played by the initiative and perseverance of these people, their ability to take into account various difficulties, overcome them, having calculated all the pros and cons of their steps, and if necessary, risk their capital.
However, this process of domestic business development was interrupted. During the Soviet period, private initiative in social production turned out to be reduced to zero, and the entire infrastructure of services was connected with a single national economic complex of the state type, within which servicing the population was considered a secondary task compared to the creation of industry and military production. In the post-Soviet period, this underestimation of the service sector and business has given rise to many difficulties that seriously complicate the process of reviving service entrepreneurship in our country.
The current period of the revival of Russian entrepreneurship, when it begins to recreate its development potential almost from scratch, is characterized by serious disproportions, economic costs and social deformations, which, however, contain many objective patterns inherent in the early stage of development of services in other regions of the world. The above circumstances, in which Russian business is recovering, do not allow service entrepreneurship to act as the locomotive of the economy that could accelerate market transformations and stimulate overcoming the general economic crisis. As will be shown below, certain areas of service entrepreneurship are actively preparing the ground for such overcoming, without changing the general situation so far. All this indicates that the current stage of domestic business in the service sector is seriously different from the stage characteristic of the developed countries of the world, where this type of business acts as a noticeable stimulus for general economic and general social development.
The transformations of the post-Soviet period made it possible to see the unequal readiness of the population of different Russian regions and types of settlements for entrepreneurial activity in the service sector. This is largely due to the territorial conditions of life, with the density and structure of the settlement of people. Below we will consider how these economic factors affect the revival of entrepreneurial activity in the service sector in our time. To this end, let us first turn to statistical data indicating the spread of small enterprises (SE) throughout the country, most of which are associated with entrepreneurship in the service sector.
At the first stages of Soviet reforms, residents of super-large and large cities (from 1 to 3 million inhabitants or more) turned out to be more ready to master entrepreneurial activity. At the stage of the birth of the cooperative movement, such cities, as the largest links in the territorial organization of society, demonstrated a large-scale concentration of capital, the availability of qualified personnel, a high degree of social initiative and adaptive capabilities of people. Later, at the stage of Russian reforms, in large cities it became possible to develop a wide range of service businesses, ranging from personal to industrial services, which could not be done in medium and small cities, as well as in the countryside.
The subsequent stages of Russian reforms, expanding market relations, showed that many other factors and conditions, in addition to urban ones, began to actively operate in the development of service entrepreneurship in the country. The unequal level of adaptation of the population to changing conditions of work and life as a whole was determined not by any one or two reasons, but by a number of circumstances. So, a lot depended on whether a particular city was diversified or single-industry, where it is located, what kind of production is leading in the city's economy, to what extent transport functions are performed (availability of river, sea ports, highways, railway junctions, airports), etc. P.
To this list should also be added a list of important socio-economic factors that significantly affect the development of entrepreneurial potential in the transition period:
the presence or absence of export and raw materials in urban production;
the degree of sectoral diversification (the share of the largest objects in the volume of urban production, in the city's budget revenues and in providing employment to the population);
the quality of urban labor resources;
the degree and nature of the social stratification of the population;
the amount of income received by the population in the city on the basis of the final results of activities (including, for example, as a result of trade in goods purchased by “shuttle traders”);
the ratio of income and expenditure of the population;
tax potential of the city per capita and one worker;
a measure of the economic self-sufficiency of the population (the share of the population whose income is more than 50% higher than the subsistence level), etc.
In these processes that can stimulate or hinder the development of entrepreneurship in the field of services, the role of the authorities of the regional and municipal levels, as well as the legal and tax mechanisms in force in the country and the region, should be highlighted. A complex combination of objective and subjective reasons in each city testified that in urban settlements with the same number of inhabitants and under relatively similar living conditions, the adaptive potential of people to new conditions could turn out to be different. The scale and quality of private service, the nature and vectors of activity of the entrepreneurs themselves were also not the same.
Based on the typology of Russian cities with different adaptive potential and unequal socio-economic dynamics, proposed by V. Leksin and A. Shvetsov, we will consider different possibilities of the urban environment for the development of service entrepreneurship in modern Russian cities. These authors distinguish the following types of cities:
cities in which, in the last years of the Soviet period, the prerequisites for the effective development of the opportunities and advantages provided by the reforms existed and were immediately used. In this case, entrepreneurship in the field of service showed a high degree of activity, constantly expanding the scope of its application and becoming an important factor in stimulating the urban economy, improving the living standards of citizens (Moscow, St. Petersburg, Rostov-on-Don, Nizhny Novgorod, etc.);
cities that positively stood out during the reform period due to new geographic, resource and other factors of investment attractiveness or with the emergence of market demand, including the external market. In this case, the redistribution of income received from the main industries or from intensive international exchange makes it possible to actively develop some especially demanded or prestigious, often expensive types of services. This, in turn, leads to a disproportionate expansion of certain types of entrepreneurship, to an unbalanced ratio of its various directions and forms of service. This group includes, for example, Vladivostok, cities of the Tyumen region, some northern medium and small cities (Norilsk, Kogalym, Noyabrsk, Nadym), as well as satellite cities of some megacities, medium and small single-industry cities with products that are in high demand for domestic or overseas markets, etc.;
cities characterized by sluggish positive changes or slowly stagnating. In this case, local entrepreneurship in the service sector is characterized by sluggish development. It may be characterized by separate jerks, sometimes stimulated from the outside, if the city is associated with promising commercial projects - a significant part of the country's large and medium-sized cities belong to this type;
cities and towns with clear signs of general depression. Entrepreneurship in the service sector is episodic here, since there are no objective socio-economic prerequisites for the development of an active service. Residents use either those types of services that have remained from the Soviet period, or are engaged in self-service - they cultivate household plots, maintain personal subsidiary plots, take small batches of agricultural products grown to the market, etc. - this type consists of a part of medium, small towns and the vast majority urban-type settlements.
The above types of urban conditions for the development of service in our society allow us to get an idea of the presence of general trends. Along with these, there are smaller trends, as well as many local features and ways of developing service entrepreneurship. So, it should be said about the stimulating role in the development of socio-cultural services of some regional "capitals". We are talking about large regional centers, which during the reform period retained a high level of economic, scientific, educational, financial, social and structural potential, which gave them the opportunity to become leaders in the development of a modern type of regional service. These include such cities as Veliky Novgorod, Nizhny Novgorod, Rostov-on-Don, Yekaterinburg, Samara, Krasnoyarsk, Omsk, Novosibirsk, etc.
Such centers stimulated the development of regional entrepreneurship in the field of intellectual and highly qualified services - scientific, educational, recreational, information and computer (in particular, the provision of Internet services), etc. Service enterprises began to appear here, able to maintain partnerships and compete on an equal footing with foreign firms or with businessmen of Moscow, St. Petersburg. This is especially true for entrepreneurs working in the field of communications and computer services, advertising, education, and tourism services. In the post-Soviet period, their own patterns of overcoming the crisis were gradually formed in large cities that form industrial and industrial hubs. The production capacities of these cities, being gradually drawn into market relations, stimulated the arrival of new workers from medium and small towns and from the countryside to the city. In turn, the stabilization of production capacities and favorable economic conditions increased the demand for various kinds of services. The preserved transport communications, social facilities made it easier for businesses to develop, which, without repeating the costs of the service sector of the Soviet period, created a service production of a modern type. Under the conditions of Russian reforms, the development of rural service entrepreneurship acquires its own characteristics. In the countryside, to a much greater extent than in the city, factors that impede the development of service business of the modern type make themselves felt. Without indicating in this case all such factors, we note that the transformations carried out in the country are generally perceived by the villagers more detached and pessimistic. Thus, many sociological surveys show that the bulk of the rural population does not consider it expedient to transfer land for private use. However, in such a reaction it is wrong to see the conservatism of the consciousness of the villagers, their resistance to market changes. Here, the traditional approach to the land, fixed in Russian society, is more likely to work, helping the inhabitants of the Russian hinterland to survive in any conditions.
The transition to new conditions of life and service took place relatively easily in those rural areas of the country where large structures for the production of agricultural raw materials and its processing were preserved. It is comparatively easy to form the infrastructure of production and social services around such agro-industrial complexes.
However, in the vast majority of rural areas of the country, the former collective forms of agricultural production were disintegrating, which confronted a significant part of the population with the problem of independent survival.
New forms of service for agricultural producers and the rural population are coming from large cities. It is urban entrepreneurs who offer rural residents to participate in local innovations, most often associated with the sale of agricultural products or their processing, the construction of summer cottages, and the recreation of citizens. The Russian hinterland retains many opportunities for such types of business.
Entrepreneurship in our country is a relatively new phenomenon, which explains the lack of a modern level of entrepreneurial culture, an appropriate level of knowledge and experience among entrepreneurs who are forced to actually start their activities from scratch. At the same time, at the present stage of management, the service sector is an important source of mobilizing the potential for economic growth in the regions, improving the quality of life of the population, which predetermines the need for its development in various sectors of the national economy. The development of service enterprises is directly related to the development of entrepreneurship in all areas of management.
Entrepreneurial activity is understood as an initiative, independent activity of citizens aimed at making a profit or personal income. The general meaning of entrepreneurship in the service sector is to open your own business, which, in turn, is determined by the desire and opportunities to engage in entrepreneurial activities. At the same time, entrepreneurship is characterized by the obligatory presence of an innovative moment, which allows us to consider it from the standpoint of two main elements:
— innovation activity as an entrepreneurial function;
- the actions of the entrepreneur as a carrier and implementer of this function.
The economic essence of entrepreneurial activity in the service sector is to search for and implement new types of services in various sectors of the economy in order to meet the explicit and potential demand of consumers. The objects of entrepreneurial activity are services rendered that can satisfy certain needs offered on the market for purchase, use and consumption.
However, the definition of “entrepreneur” includes small merchants, farmers, the director of a large commercial bank, and owners of small service enterprises, which differ significantly in the nature and content of work. Therefore, it seems wrong to consider entrepreneurship as a special kind of professional activity. It is more expedient to proceed from the definition of entrepreneurship as an innovative economic activity carried out under conditions of risk and uncertainty and aimed at achieving profit. Entrepreneurs act, first of all, as persons who own or dispose of the property that they invest in their enterprise using wage labor. The hallmarks of entrepreneurial activity from a psychological point of view are: economic freedom; the opportunity to secure a higher level of material well-being; the opportunity to more fully realize their professional abilities and inclinations; high responsibility for the results of their activities; lack of a guaranteed minimum income and the risk of loss in case of failure; lack of help and protection. These signs are especially typical for entrepreneurs operating in the framework of small and medium-sized enterprises.
The formation of the foundations of a market economy in Russia, as in a number of countries, is accompanied by the emergence of a large number of small and medium-sized organizations. The role of small and medium-sized businesses in a market economy is significant - this is its essential part, base and integral component of the competitive market mechanism.
Small and medium-sized businesses, dynamically responding to changing market conditions, endow the market economy with the necessary flexibility and adaptability. These features are of particular importance in modern conditions due to the increased individualization and differentiation of consumer demand, the acceleration of scientific and technological progress, and the expansion of the range of services provided. Small and medium business structures mobilize significant financial and production resources of the population (including labor and raw materials), unclaimed in its absence. Small and medium-sized businesses make a significant contribution to the formation of a competitive environment, which is of paramount importance for the domestic economy in modern conditions. It is difficult to overestimate the role of small and medium-sized businesses in solving the problem of employment. Finally, it is necessary to note the importance of small and medium-sized businesses in overcoming social tensions and in the democratization of market relations, since it is small and medium-sized businesses that are the fundamental basis for the formation of the “middle class” and, consequently, the weakening of the tendency towards social differentiation inherent in a market economy. All these and other properties of small and medium-sized businesses, especially in the service sector, make their development the most important factor in Russia's economic growth. Without small and medium-sized businesses, the market economy is not able to function and develop effectively. Consequently, their formation and development is a strategic task of economic policy in the transition to a socially oriented market economy.
Summarizing the experience of developed countries, as well as the initial domestic one, E.P. Kulik notes that the progressive movement of small and medium-sized businesses is: the most important factor in successfully solving the problems of forming competitive, civilized market relations; expanding the range and improving the quality of goods (works, services); bringing the production of goods and services closer to specific consumers; promoting economic restructuring; giving it flexibility, mobility, maneuverability; attracting funds from the population for the development of production; creation of additional jobs, reduction of unemployment; formation of a social layer of owners, owners of enterprises (firms, companies); activation of scientific and technological progress; promoting the activities of large enterprises; liberation of the state from low-profit and unprofitable enterprises due to their lease and redemption. These and other economic and social functions of small and medium-sized businesses put their development in the category of the most important state tasks, make them an organic part of the economic policy of the state.
Despite this, small business in the Russian Federation is still underdeveloped (table). In general, the share of small business in the service sector in GDP does not exceed 15.5%. Meanwhile, in the EU countries, the share of small and medium-sized businesses accounts for more than half of the GDP created. The total number of small businesses in individual countries is also impressive: 2.3 million in Germany; 6.5 million in Japan; 19.3 million in the US.
Table
Development of small business in the Russian Federation Source: Economic newspaper. - 2008. - No. 16 (April). - p.1.
The goal of entrepreneurship is not only to make a profit in the moment, but to make even more profit by increasing activity in the market. The environment in which entrepreneurial activity is carried out determines the characteristics of the areas of activity, the largest part of which relates to intermediary activities, and not to purely industrial ones. The transition to market relations predetermines a change in the tasks of the service sector, the system for generating income for enterprises in the service sector, as well as the formation of new organizational and legal structures that are adequate to the requirements of the time.
Successful development of entrepreneurial activity in the service sector is possible only with the formation of diverse organizational forms of enterprises and their management systems, because Today, the main problems of entrepreneurship development are: insufficient level of management and marketing of innovative and commercial activities of service enterprises; the level of organization of enterprises that is not adequate to the requirements of the market; low professional level of personnel, etc., these problems simultaneously act as factors hindering the formation and development of the service sector in various industries.
In modern conditions, the increasing importance for the functioning and development of enterprises in the service sector, especially small and medium-sized forms, is becoming entrepreneurial, creative initiative, competence and efficiency in the organization of sales of services. For this, it is necessary to study and apply the experience of the developed countries of the world and Europe, where large labor and financial resources are concentrated.
The commercial activity of enterprises in the service sector should consist in solving a set of tasks of a different nature: collecting data from market research of the services market; timely and high-quality provision of services to consumers in accordance with contracts (orders); ensuring the communicativeness of the system of relationships of all participants in the process of production and marketing of services, etc. With this approach, it becomes obvious that it is necessary to forecast and conduct marketing research in order to form plans to expand the range of services provided, their structure, distribution channels, attract consumers, etc. Transformations in the country's economy impose new requirements on enterprise management, changing its focus on quality, profitability and a range of services.
When developing a business management system in the service sector, it is necessary to take into account the distinctive socio-psychological features of entrepreneurship in Russia, associated with the specifics of historical development, national traditions, and features of the current state of the economy, politics and culture of Russian society. Such an approach can adapt the applied management tools to the specifics of regional and sectoral changes. Entrepreneurial activity in the service sector will provide jobs for a large number of the able-bodied population of the region, because has a significant labor-absorbing capacity. This should contribute to the sustainable development of various territories in the region.
The organization of an entrepreneur's own business can be carried out in various ways: through the purchase of an existing one, the establishment of a joint venture with other individuals or legal entities, the creation of a new enterprise. The last way is connected with the presence of a new idea. The freely emerging market situation requires a wide range of service enterprises of various specializations, types of activities, industry affiliation, forms of ownership. However, statistics show that, starting from 2000, the number of business structures in the service sector, especially social ones, began to decline, and the volume of paid services to the population by type is very limited.
On the territory of Dagestan in 2009, paid services were provided to the population for 53,452.8 million rubles (which in comparable prices is 12.2% more than in 2008), of which 76.0% accounted for transport, communications, housing and communal and household. And other types of services, especially of a cultural, educational and medical nature, tourism, sanatorium and recreation, necessary and possible due to the climatic conditions of the region, contributing to the development of the social sector of the economy, occupy an insignificant place in the structure of the volume of paid services (10%). In 2009, the share of expenditures on payment for services in the consumer baskets of the population of Dagestan amounted to 15.1%, which corresponds to the level of the previous year (in 2008 - 15.3%).
Of the total volume of paid services, small enterprises of the republic provided services for 29,818 million rubles, which is 55.7% (in 2008 - 40,671 million rubles, respectively, or 70.5%). Such a significant decrease over the year in the share of small enterprises in the volume of paid services rendered to the population indicates a deterioration in the situation with the entrepreneurial activity of small businesses in the region.
The role of the service sector in shaping the region's economy is correlated with the material sphere and has a certain sectoral focus. Thus, the contribution of trade and public catering is comparable with industry (18%), housing services - with construction (5%). In recent years, the number of entrepreneurial structures has increased significantly in such industries as finance, credit, insurance, culture, healthcare, housing and communal services, etc. In general, all the main trends in the development of the service sector can be considered in accordance with general structural changes, and with taking into account the general conditions conducive to an increase in employment in the provision of services. Therefore, we can talk about the relationship between the expansion of the sphere of material production and the growth of labor productivity with the development of the service sector.
The development of the labor market that meets the requirements of the time is hindered by a whole range of problems that have arisen in connection with a change in the economic formation, irrational structural transformations, as a result of which there has been a decrease in the level of employment against the backdrop of a recession in the economy, an increase in hidden unemployment, which is the specifics of the Russian form of employment, and also an increase in the number of truly unemployed. At the same time, statistics show a decrease in the economically active population, a deterioration in the financial situation of the unemployed, caused by imperfect benefits and delayed payments. Solving the problem of employment can help accelerate economic reforms, which should be facilitated by the development of infrastructure in the service sector, the creation of small and medium-sized business structures that create new jobs. To solve employment problems, it is necessary to create conditions for the development of the service sector, covering household and housing and communal services, tourism, where live labor is used and its high qualification is not required.
The development of consumer services for the population as a whole has a positive trend, with the overwhelming majority of consumer services in the republic (90.6% in 2009) falling on the share of eight types of services: repair, dyeing and tailoring of shoes (9.4%); for the repair and tailoring of clothing, fur and leather products, hats and textile haberdashery, repair, tailoring and knitting of knitwear (7.0%); for the repair and construction of housing and other buildings (30.3%); hairdressing (14.3%); rental (10.4%); repair and maintenance of household radio-electronic equipment, household machines and appliances, repair and manufacture of metal products (6.5%); maintenance and repair of vehicles, machinery and equipment (10.4); production and repair of furniture (2.8); these services are predominantly provided by small businesses and organizations, rather than individual private traders.
Shoe repair services, furniture manufacturing, photo studios, ritual, i.e., services have sustainable development. entrepreneurs who have adapted to the new business conditions can adequately respond to changes in environmental factors and market conditions. The most significant positive dynamics in 2009 compared to the previous year was characterized by 3 types of personal services: services for the manufacture and repair of furniture (an increase in the volume of services by 2.7 times), services for the repair, painting and tailoring of shoes (an increase in the volume of services by 1 .5 times), photo studio services (an increase in the volume of services by 1.5 times). Services for the repair and construction of housing, on the contrary, demonstrate the opposite trend (a decrease in the volume of services rendered by 30%).
The overall labor intensity of household services is quite high, which requires a high price, narrowing the circle of potential customers.
An analysis of the development of the service sector in the region shows that the most problematic are the sectors of social security and social services that need state support, regulation of financial flows in favor of population groups in need of such support. Many sectors of the social sector are not adapted to the new economic conditions, despite the presence of mass demand for the services of these sectors. Such sectors include healthcare (medical services), education, and the intellectual sphere, despite the fact that there are already certain positive trends in the development of services in these sectors. The scale of medical, educational, cultural services that are provided directly to each person individually should reflect the level of the state's interest in maintaining health and raising the level of knowledge, intelligence and culture of its citizens.
Most business structures in the service sector are private (70% of the total) and municipal (22%). The share of liquidated enterprises and organizations in the service sector in relation to newly registered ones over the past year is about 20%. Despite the rather rapid development of the services market, there is no effective impact of the functioning of the service sector on GDP growth in the region. This is due to many factors of socio-economic development of the region, its territorial features. However, the main problem hindering the development of entrepreneurship in the service sector is the lack of effective management at all levels. The conditions of taxation constrain the growth of activity of entrepreneurs working in the service sector in many sectors of the regional economy. Adopted at the highest level and current regional programs to support small and medium-sized businesses are aimed at creating general market conditions for the functioning of the service sector without taking into account the tasks of financing them, stimulating entrepreneurial activity, the specifics of regional territories, and harmonizing with the development tasks of the region and the country as a whole. This discrepancy predetermines the emergence of many problems associated with the lack of coordination of economic and social interests, with a tendency towards the commercialization of the social sphere. Sectoral management bodies do not coordinate the interests of the development of their industries with the interests of social groups of the population living in a particular territory. In the region, at present, there are practically no organizational forms for identifying the interests of the population and enterprises in the service sector, while the formation of a consumer market is impossible without a comprehensive study of the factors influencing its development.
When implementing these management functions and forming a mechanism for managing the development of the service sector at the regional level, it is necessary to take into account the current circumstances of an objective nature:
— differences in the level of socio-economic development of individual regions;
- the presence of enterprises with various organizational and legal forms and forms of ownership;
- the degree of influence on their activities of the state;
- organizational, economic and legal support by the state for the implementation of the tasks of regional policy;
— infrastructure support for the functioning and development of the service sector in various sectors of the region's economy.
The social orientation of the management system of the service sector in achieving the set goals should be maintained in the process of development of enterprises, industries, and the region as a whole. In a developed market economy, the main element is the consumer as a representative of the middle class, whose consumer basket includes a certain standard of service consumption. The consumer basket is constantly reproduced at the expense of the own incomes of the middle class, it is ensured with the help of the market that the balance between the demand for services of a different nature and the supply from business structures is ensured. This approach ensures wide access of the population to services without the participation of the state, thanks to the high solvency of consumers and the developed business sector of services. In Russia, a situation has developed when, as a result of economic reforms, the standard of living of the population has fallen sharply. Therefore, despite the rapid development and spread of entrepreneurship, the effective demand of the population remains low and does not allow the effective development of the service sector, especially science-intensive and intellectual industries. In other words, with a low effective demand of the population, the market mechanism and private entrepreneurship are not able to solve the problem of wide availability of various types of services, which predetermines the need to develop and implement a regional policy aimed at developing a system of goals, objectives, legislative, economic measures for the development of the service sector, maintaining employment stability, environmental protection, etc. The methodological prerequisite for the implementation of such a policy is a clear definition of the functions of management and regulation, i.e. what kind of social needs of the population and in what way are provided by the region in the process of its functioning. Therefore, the main feature of managing the development of the service sector is the management of a significant part of industries and enterprises by the state. The economic function of regional administration in this case is the most appropriate use of material, labor and financial resources to meet the needs of the population and ensure the necessary standard of living.
Taking into account the main provisions of the functioning of the management system for the development of the service sector and based on the trends of modern management, the management system should reflect, first of all, a turn to the person - the consumer of services, expand the use of market mechanisms, increase attention to preventing problems arising in the development of the service sector. At the same time, the problem of information support remains difficult, the solution of which should be reduced to assessing the position of the country, region and enterprises in certain industries in which the service sector operates, to determining the real state of innovative activity in the region, competing enterprises, which will help determine industry and regional areas of state support for business activities in the service sector. The tasks of information support for business activities in the service sector should be adequate to the general directions of reforming and developing statistics in the region (country), which are as follows:
— adaptation of statistics to the changes taking place in the socio-economic sphere;
- ensuring the timeliness of the formation, completeness and efficiency of statistical information through progressive monitoring methods;
— improving the quality of information through interaction with information systems of other regions;
— effective provision of all categories of users with the necessary statistical information;
— strengthening the role of the regional level in the course of compiling innovation statistics and the dynamics of the results of entrepreneurial activity in the service sector.
The weak development of the infrastructure to support small businesses, offering a high-quality set of necessary services at an affordable price, is a necessary area of state support. At the same time, the infrastructure should be equally accessible and have a “throughput” adequate to the needs of small businesses. For the development of entrepreneurship in the service sector, it is possible to use the mechanism of supporting small business by large business, which should become one of the important directions in the policy of state economic regulation. Given the importance of the infrastructure to support entrepreneurship in the service sector, which performs a social function, its development should be partially or fully financed from public funds. With partial state financing, additional funds from entrepreneurs and financial resources from private sources on a non-commercial basis can be attracted. Infrastructural support for small businesses is based on conditions that differ from market ones: free consultations, services at reduced prices, low-cost rent, etc., which is fundamentally different from the system of enterprises and organizations specializing in the provision of commercial services of a different nature.
However, objectively there are internal problems of the development of civilized entrepreneurship in the service sector, which include the following:
- low level of socio-economic development of the region of the Republic of Dagestan as a whole;
— low standard of living of the population;
— non-competitiveness of products and services;
— unfavorable investment climate in the region;
— obsolescence of fixed assets;
- the deficit of the republican budget and the complete financial dependence of the Republic of Dagestan on receipts from the federal center.
At the same time, the lack and inconsistency of the legislative acts of the Russian Federation, their lack of adaptation to the functioning of the economy of the republic, the lack of a mechanism for exercising the rights, powers and responsibilities of management structures at the highest level, the lack of a rational system for managing business activities in the service sector remain serious problems.