[0:01] Hello, and welcome to a brand new episode of the Elevated Entrepreneur Podcast. If this is your first time here, I am so excited that you’re here. Thank you for taking the time to listen to me and share my thoughts. And if you’ve already been here before, then you know that you can head on over to elevatedentrepreneur.fm and get access to a whole lot of shownotes, transcriptions, and amazing episodes.
[0:26] Today’s episode is me talking to you about The 5C Principle. Now what is The 5C Principle? And why did I come up with The 5C Principle? Well, here’s the thing as a business owner, and as an IT expert, I talk to a lot of business owners, especially in the retail and f&b sectors. And I find that they are always confused when they’re looking for new software. Whether it’s a POS or an inventory management system, or even a CRM system, there is just so much information coming your way, their way, it’s hard to make a choice, which is why I’m so excited to present to you the The 5C Principle that I hope you will find very helpful in your next software purchase. So without further ado, let us cue the music.
[1:13] Your listening to the Elevated Entrepreneur Podcast, a podcast designed to help retailers restauranteurs and entrepreneurs simplify business operations and use modern technology to elevate their business. here’s your host, Dhiren Bhatia.
[1:33] All right, if you are looking to purchase a software for your business, whether it’s an inventory management system, or a system, or even a CRM system, then I want to introduce you to what I’m calling the five c principle that I’ve created for my customers. And I hope that you will find this of value. So let’s get started. What are The 5C’s? The 5C’s stands for commitment, capabilities, customization, care, and cost. Now, before we get into The 5C’s, and I explained to you the different C’s, I want to tell you about why this is important. As a business owner, or even as a manager, sometimes we are faced with the decision of buying a software system for our business, to be able to better manage increase in sales, or desire a better customer experience, or even just change with the times and make sure that our organization or our company, our brand is ready for the future, which is why software can play a huge role in the success of your business. And I find that a lot of times when customers are choosing their software, they get overwhelmed with a, the number of choices and b, with the right questions to ask. So I hope that The 5C Principle will help make this process simpler for you. So let’s get started with C number one, which is commitment. What is commitment? What are we talking about when we say the word commitment? The word commitment, in this particular case refers to the commitment of knowing first and foremost, what are your needs?
[3:06] A lot of times I find that business owners go looking for software without fully understanding what are their needs. And they might be the usual, I need a software for doing a, b, and c but I think it needs to go a level deeper, which is why the first c commitment is a very big one. It is taking the time to sit down and write down, what are the features that your business and your team members need today to grow the business? Or what are the features they need to solve the problem and the challenges that they have ahead of them. It can be a simple word document or even just a simple text file with bulleted points of current requirements. And this overtime, can become a really complex document and a very handy document to be able to use and solicit feedback on but the first step is getting started with writing down. What are your needs. And this may sound like a complex undertaking for most business owners. But let me repeat, it doesn’t have to be it can be a very simple document that allows you to pin down your thoughts or from your team members. What are they looking to do in a software? And yes, certainly you can write down the most obvious one.
[4:16] So for example, if you’re looking for a POS system, we want to do sales, we want to do returns, we want to do refunds. But I encourage you to take that a step further because that is the most common use case of a POS system or an inventory management system anyways. Another example is for CRM systems, I want to be able to grow sales, I want to be able to manage my sales process again, that is exactly why you’re looking for a CRM software in the first place. So I encourage you to take that a step further. Dig a bit deeper and really narrow down what are the challenges that you are having in the business are what are the requirements from the business that are predicated on the need of a software.
[4:53] The second part of the C four commitment is really prioritizing current needs versus long term needs. Again, I find this to be a very common occurrence when I’m talking to clients over at my business Cloudscape. A lot of times, customers are wowed by the shiny object syndrome, or what are the shiny features in the software even though they may not need them. But it is so powerful that they completely forget about what is it that they need today. So the commitment to prioritizing current needs versus long term needs, and also versus nice to haves. Which is why the commitment of gathering your needs into a requirement document is such a key step to begin with, that it can really simplify all the other following steps.
[5:42] Now some of the questions that you can ask, as part of the commitment phase, whether this be with you or your team members, I’ll give you a quick list but I’ve also created a very special handbook for you to download. So if you head on over to elevatedentrepreneur.fm/22, you’ll be able to find a very specific handbook that I’ve created just for you so that you can download it and use it any time you like.Some of the question that you should consider are, do we have all of our processes documented? Do we have our current needs documented? Do we have an eye on the must haves versus the nice to have? Do we have a view of the short term goals from the software that we are looking at? Is this software work for other businesses like mine? What is the vendor of the software trying to achieve? So I hope these questions give you an indication of what questions you need to ask while you create your requirements document and also while you evaluate the software, once you get to that state. So that handbook again, is elevatedentrepreneur.fm/22. You’ll find that handbook right in the middle of the page. So please feel free to download it and use it as you see fit.
[6:55] Let’s look at the second C, which is capabilities. The capabilities section in The 5C Principle talks about is this system, really for my kind of business. Again, as I mentioned earlier, a lot of times business owners get carried away with seeing shiny features or slick marketing campaigns or slick website pages. But really the question is, is this software for my kind of business? And I must say, there isn’t a software that’s going to be tailor made for your business, especially today in the day of cloud systems. If you’re looking for a POS system, or an inventory management system, and it fits 90 to 95% of your needs, then you’re golden. Because there is no such thing as a perfect software, as there is no such thing as a perfect house unless you build it from the ground up. And as we know, building anything from the ground up can be a very costly affair. So which is why I’m recommending that if you find a software that fits 95, 90, even 85% of your needs, then it’s a great time to invest in that software and then grow with that software, and then fully extend its capabilities till you run out of its feature set. And at that point, you can look for a newer software because now your business has grown and your software needs have changed. Also, the second big part of capabilities is knowing what kind of business does this software made for.
[8:18] Sometimes we get carried away with seeing big names on a website, or seeing examples of other businesses. Even though that software may not be for your business, it just makes us so happy and excited to see that big names use the systems. And then we start to follow along that train of thought and we get lost in that train of thought. So finding out what kind of businesses does this software have the capability to support. And to that point, also ask for examples of your kinds of business that this offer is already supported in the past.
[8:53] The third thing under capabilities is the future growth and scalability I mentioned earlier, we need to have the commitment of knowing your current needs versus future needs. And while it’s important to know what the future needs are, remember that we’re not buying a system purely based on future needs or purely based on current needs, it’s going to be a healthy balance. And I say this from experience because when I purchased HubSpot, which is a marketing automation system for Cloudscape, I got really carried away with all the brilliant features that it had. But after having spent loads of money on paying the subscription for over two years, I can tell you with reasonable confidence that we use probably 40% of that software. So I want you to not make that same mistake and really understand what are your current needs? And then what is the need for the future and what can this software fulfill for you in the near short term and the midterm. Notice I didn’t say long term because in the long term, your business will have changed significantly and so whether it’s software requirements.
[9:51] The third C is customization. customization these days is a word that is thrown around quite a bit and again I think a lot of business owners get carried away of wanting to match the software to the business to a tee. And then they asked to customize every nook and cranny of the software. And I will say this, almost anything is possible today in life, if you throw the right amount of money at it, and the software vendor that you are probably talking to has no qualms of taking your money and customizing that software to your heart’s desire. But the question is, is that really what you need? And are you trying to build something from the ground up in this particular software.
[10:28] So please be wary of how much customization you need versus how much customization the software can offer. And another point that I want to talk about in here is the idea of needs versus wants. If you have done the first two steps, and you’ve created your requirements document under commitment, then you’ll know what is needed versus what you’d like to have, or what is probably something that you can use in the future, or what are these bright, shiny features that you have absolutely no interest in using, but they seem really cool to work with. And that brings me to another point under customization is the shiny object syndrome. Entrepreneurs in me included have a terrible tendency to be attracted to the shiniest object. Because we’re always looking for new challenges. We’re always looking for ways to grow our business. And sometimes a good marketing campaign or slick feature sets can derail our thought process. And we start to go after something that we probably don’t need today. So be wary of the shiny object syndrome. And finally, under customization, what are some other overall management and reporting features you have access to within the system. And the final point under customization is the overall management and reporting aspect of things. We’re not buying systems just to solve problems, we’re also buying systems to make decisions. And I always say that good numbers, good data can help make good decisions.
[11:49] A lot of us business owners are so intuitive, and we have such strong guts that we’re able to make decisions based on our gut and intuition. But sometimes that’s not enough. Being able to make good decisions, requires great numbers. And a software should be able to do that for you in a very easy to understand manner. So when you are talking to your software vendor, do ask about what kind of overall management and reporting features the software can give you.
[12:17] The fourth C is care. And the care aspect of this conversation is very, very, very important, not because you’re just looking for someone to give you support, but you need someone there for the ongoing help and ongoing scalability piece as well. So in this particular case, sometimes an implementation partner can be a very key role to have on your side, you as a business owner may or may not have the bandwidth, to start rolling out systems, learning from YouTube videos, googling everything that you need to do, or even have your team members do it. It’s not something that they know. And they’re probably going to make a lot of mistakes. So do look for local support and representation in your area. If you’re looking to implement a new software. And, again, care has many more aspects to it. But this is the one thing that I want you to understand. And remember, when you’re looking for a new software, also, in under care, the idea of investing in the brand is so important.
[13:16] These days, there’s probably 100 different software systems for the software that you are looking for. And it’s very hard to cut through the noise. Which is why do ask the brand and do ask the vendor what their roadmap looks like what is their future look like and what is the niche that they are targeting. If there’s a great fit, then by all means, please proceed. But in the case of my example that I gave you earlier, when I decided to use HubSpot was a complete misalignment from my end versus HubSpot. And HubSpot is a great marketing automation software. And what I was looking for was a simple CRM system. And while HubSpot does offer a CRM, the overall roadmap for HubSpot is really to automate a company’s marketing, which is not what I was looking for. And that’s why I say, do look for investing in the brand and look out for their roadmap.
[14:05] And the last C is cost. And you’ll notice that I didn’t put cost as the first few C, because really, if you’ve done the first four C and you followed them through, then cost is not going to be an issue. However, I find that a lot of business owners end up looking for cost as the first benchmark. That’s their first bullet point to check off that list. What is the cost of the system. And that I think in some ways is a flawed way of thinking. I’m not saying that cost is not important. But if it has the right capabilities, and it offers the right customization together with the right care options, then cost should be one of the very last factors to be checking for because it takes up all of the other boxes, and you’re clear on what you can achieve from the system. And that brings me to cost versus return on investment. So when asking for a cost of the system, I usually turn that question around and ask what is the return on investment from the software so if you’re talking to a vendor or an implementation partner, feel free to ask them. What is my return on investment from this software? Because cost is merely a sum of that function, isn’t it? If I’m able to recoup and get enough return on investment, then cost is nothing but just a number.
[15:14] So do ask the software vendor or the implementation partner, what are the potential ways of making return on investment and may not just be increase in sales, or increase in inventory numbers, but there may be other softer effects such as lower staff cost, lower time cost, higher productivity in staff. And so there are so many other ways to gain return on investment. With that, I do have one more thing to tell you under the last seat, which is cost. And that is, cost of the software is just scratching the surface. There are many, many other pieces to cost, including revenue enhancement, that is increasing your revenue cost reduction, which is how you can reduce costs using this software. And this cost avoidance, which a lot of people don’t even think about cost avoidance is to be able to avoid a cost completely which you may have or you may have in the future. So look for opportunities on how this particular software that you’re looking at can help you avoid cost.
[16:15] So there you have it, folks, The 5C Principles, commitment, capabilities, customization care, and finally cost. And I hope you’ll use The 5C Principle the next time you’re looking to make a software decision in your business.
[16:32] If you haven’t already, please consider subscribing to the Elevated Entrepreneur show at elevatedentrepreneur.fm or wherever you’ve been listening to this episode. And finally, if you would, please do leave the Elevated Entrepreneur Podcast a review so that you can make it easier for other entrepreneurs to find this show. Thank you much love and I’ll see you in the next one.
