How to survive the downturn
The current world wide economic downturn has, again, highlighted why small business owners must actively scrutinise their finances. Many small business owners still rely on old and/or out of date information.
Last week, I recently met with a new client who had experienced a 25% decline in their sales. When I asked them about their cost structure, they admitted that they had no idea and hadn’t had any financial statements prepared since 2006!!
Not only had they ignored the tax man for 3 years, but it’s also poor business practice.
Recessions often provide a “wake-up call” for many business owners as it forces them to evaluate what they are doing. In the current uncertain climate there is very little excuse for ignoring your key financial indicators.
One efficient way to understand your business’ financial performance is to prepare a simple cash book. For as little as $100 per month, you can generally get a book-keeper or accountant to do this for you.
Understanding your current profitability, cash flow and break-even points will help you to review your spending and help you to set budgets. This may include putting money aside for tax liabilities and owners’ drawings/salaries.
I have seen far too many small businesses suffer because their owners failed to meet their tax obligations or pay themselves.
Talk with your accountant. They should be able to advise you how much to set aside for tax – I accept that this may reduce cash flow in the short term but it may avoid unnecessary surprises later. Consider setting a regular amount aside in an interest bearing deposit account or use your credit card for some expenses to take advantage of the interest free periods that many credit card companies now offer.
Also examine your expenditure as there may be ways to easily reduce costs too. I have put a complete stop to anyone purchasing anything in my businesses without my express approval.
This had an immediate positive impact on our stationery, printing and postage expenses. Remember it’s your money that your employees are spending…not theirs!
I am currently consulting with a client who “shouted” their staff morning tea twice a week. On my advice, she now buys the ingredients and asks her daughter to bake home-made muffins and she also now provides on-site coffee facilities. She is delighted that she now saves over $700 per month from just this one simple change. What small changes could you make?
But be careful…many small business owners cut back on the wrong expenses. Marketing and sales remains an important area for many of them. However, I have lost count of the number of clients who blatantly waste money on marketing and advertising campaigns that simply do not work. They simply throw more money at it, hoping that the ‘phone will ring. For more marketing tips, visit www.themarketingdude.com
Is it time that you reviewed your business finances? Who knows…a few hours of your time may result in some pleasant surprises.
How to improve your reading speed
What if you could TRIPLE your reading speed in under 60 minutes?
That was the question Dr Michael Masterman asked me to consider — when he sent me a review copy of his new speed reading audio course three months ago. And you won’t be surprised to hear that I didn’t believe it!
Now, I’ve always avoided learning how to speed read.
Why? Because I always believed it’d take hours of training to really “work properly.” And I’d heard a couple of horror stories too. (One very well-known six-CD course essentially suggests listening to fast music while reading. Now that’s incredibly draining – and not exactly suited to a slow-paced romance!)
Michael promised I would literally triple my reading speed in well under an hour (without fast music or other gimmicks!) — and said that his audio course included tests to prove it. He also said I’d be able to maintain that super-fast reading speed, even weeks later.
I took the course. It worked. And I’m STILL reading at lightening speeds!
That’s exactly why I wanted to write and tell you about Michael’s “Speed Reading Secret” course today!
But don’t listen to me chat about it. If you want to blast through e-mail messages, Web pages, revision, books or reports (and pick up an amazing new vocabulary along the way), then check out his site:
The course includes tests, so you can literally see just how well you’ve improved. And if you don’t improve enough, claim your money back through his guarantee!
Michael predicts the average person could save one day a week following his advice. I think he’s probably right.
Enjoy!
What are the ways to eliminate price objections?
Almost everybody in sales has suffered price objections at some point.
However, most salespeople follow the wrong path and try to grab a potential customer by asking invasive questions like:
“If I can offer solution to your such and such problem, will you buy that one today”? or
“Holding back is the only thing that you can do”? or
“What can I do to earn you business”?
Hang on! Such manipulative sales tactics are the real reasons that make the prospective customers feel uncomfortable and they find themselves in a state of pressure to buy that product or services.
But the ultimate answer to this is to eliminate the objections altogether.
You can achieve this by focusing on ways that will help you meet the requirement of your prospective customers.
It is also a fact that the salesperson who asks more and more questions face lesser objections at the time of sale.
The reason is quite simple; that means that the salesperson reveal many potential objections during the early stages of sales cycle. Moreover, there are plenty of questions that are taken up by a sales person that will help you reveal potential objections:
“What is the time frame that you are working with”?
This question leaves a good effect when asked, which means that “When do you think you will buy”, this will help people by putting them on a self-protective side.
“Who else is involved in the decision process”?
This is the most important question that is usually asked by the salesperson. The main purpose of this question is to find out the other person who is involved in the decision making process.
So, if the final decision is influenced by someone else, then you can end your search, and try to close the sale even without his or her presence.
“Who else are you talking to?”
This is the most frequently asked question. This will enable you to understand what other companies or vendors are making their bids on a particular project. This will help you in differentiating yourself from your respective competitors.
“How was the experience?”
You can answer this question based upon your previous experience with your prospective customer.
You can now position your service or product to excel their experience at your competitors.
So, these are a few tips that will help you ask more pertinent information from your potential customers, which will ultimately allow you to position your service and product in a way that suit best your customer’s needs and demands.
Terms associated with ongoing financial meltdown
Given all of the problems with the current global financial markets, you might like to reacquaint yourselves with the following terms:
CEO –Chief Embezzlement Officer
CFO– Corporate Fraud Officer
BULL MARKET — A random market movement causing an investor to mistake himself for a financial genius
BEAR MARKET — A 6 to 18-month period when the kids get no allowance ; the wife gets no jewelry, and the husband gets no sex
VALUE INVESTING — The art of buying low and selling lower
P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing
BROKER — What my broker has made me
STANDARD & POOR — Your life in a nutshell
STOCK ANALYST — Idiot who just downgraded your stock
STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves
FINANCIAL PLANNER — A guy whose phone has just been disconnected
MARKET CORRECTION — The day after you buy stocks
CASH FLOW — The movement your money makes as it disappears down the toilet
YAHOO — What you yell after selling it to some poor sucker for $240 per share
WINDOWS — What you jump out of when you’re the sucker who bought Yahoo @ $240 per share
INSTITUTIONAL INVESTOR — Past year investor who’s now locked up in a nuthouse
PROFIT — An archaic word no longer in use
Choose a good domain name to help promote your business
Did you know that a good domain name can give a big boost to your online business?
In fact, it can help you take your online business to new heights. Almost every successful company, big or small, is using the Internet to reach its target customers and increase its website traffic. They create their commercial site; create awareness of their brand and market their products and services online.
Personally, I use a company that is based in Australia as I find their customer service and time zones suit me. Please visit here if you’re interested in using them.
But does that mean every entrepreneur who opens a commercial site succeeds in conducting online business effectively and in increasing his/her website traffic. The answer to this question is an emphatic “No”.
You have to be smart enough to grab the opportunity and make your presence felt over the Internet by enhancing website traffic. This will, in turn, give impetus to your onine business promotion campaign.
Now, how do you achieve this?
One of the most important means to increase website traffic is to create a catchy domain name. Choosing a good domain name and registering it properly can work wonders for your online business. Building a site does not suffice the purpose of online business promotion. There are lot more things that you need to do to achieve your company’s goals.
Creating a domain name is just one aspect but a very essential one. You need to understand creating any domain name won’t help. You have to come up with some unique ideas and decide on a unique name that is catchy and meaningful.
A Domain name represents your website address and can end with anything such as .com, .org, .biz, or .info. It is necessary to select a relevant domain name, something that relates to your company or its products. Many people think that they should keep the domain name of their site in the name of their company but top shot Internet entrepreneurs say that you should instead keep a name that reflects the main aspect of your company as in what your company deals in.
If Internet users get a quick idea as to what your company has to offer them or what is in store for them if they click on your link, there are greater chances of your potential customers visiting your site, thereby leading to sales conversion. Be clear in your thoughts and do not confuse your site visitors. It is good to maintain some mystery but don’t hide the thing completely.
Give a clue to Internet users as to what are the benefits they are likely to get if they see your website link and go through its contents. A good idea is to include search engine optimised keywords in your domain name, making your business promotion campaign successful.
Register several extensions of your website such as abc.com, abc.net and abc.org. This will prevent people from copying your domain name and using it to promote their online business. There are many websites that allow you to register your domain name. Conduct your study and select an authentic registrar.
Further information to help you with your marketing can be found at www.themarketingdude.com
How to achieve anything in your business
I am a big believer that “if you think you can, you can” and “if you think you can’t, you cant”…either way you’re right.
So the next time you say something can’t be done, stop and take a look at this video.
I know this won’t please the animal activists but it does stop and make you think. If you are like me, you will also be filled with a profound sense of regret and sorrow for what we are doing to our planet and our fellow sentient beings.
Using a scorecard
Introduce a scorecard to give you an early warning system that all is not well.
Businesses of all sizes, be they large corporations or a newly-established small business, spend a considerable amount of time and effort developing well-thought out strategic plans that work to pave the way for their business’s success. Yet, many of them fail to reach their goals.
Frequently, it is because they are unable to measure their performance accurately and, therefore, only realise something is wrong when it is too late.
Using a scorecard is a great way to improve the process of measuring your business’s performance. A scorecard is a set of performance measures that are categorised according to the different performance aspects of a business. Scorecards vary immensely in their appearances, content, and intricacy.
Some will include a dashboard that covers the broader performance goals of an enterprise and then expands them into more detail. Others are colour coded to make it easier to scan through them.
Using an automotive supplier as an example, one of the strategic performance goals in the dashboard of its scorecard may be “market leadership through building quality cars”. Two performance metrics that contribute to the achievement of this goal may be “the percentage of reduction in annual warranty expenses” and “the percentage of reductions in car recalls”.
When structuring a scorecard, it is important that you correctly identify what performance metrics are critical to the success of your business and need to be included in the scorecard. If you answer the question well, the scorecard can make for an extremely tangible and concrete way to define success.
In general, two types of performance measures should be included in your scorecard; those that account for the achievement of current operational goals and those that account for the achievement of future goals. The best thing about scorecards is that they allow business leaders and managers to quickly understand how their business is performing overall and to identify if there is a performance gap in a particular area.
Because they are structured to reflect performance across several business areas, when there is a lag in one area, it will stand out clearly. This, in turn, allows the business manager to react immediately and solve the problem before it becomes too big to handle.
If you are an entrepreneur with a growing business, constructing a scorecard will help you to better understand what functions of the business you need to work on to ensure that your business continues to do well. For those of you who are interested in assessing the current performance of a business, read my article “Discover 7 Common Causes of Cash Flow Problems in your Business before it is Too Late”.
Stop playing Santa- you’re in the business to make money
Words like “corporate responsibility” and “business conscience” have become quite the buzz of late. Many people think that businesses have become too selfish and that, in their pursuit for profits, they should also give something back to society. Now that all sounds good if you’re Bill Gates or Sir Richard Branson and can afford that level of generosity. But what if you’re a small business owner just starting out? How far should, or can, you go when it comes to being generous?
Many small businesses make the mistake of giving too much. So much, in fact, that it ends up negatively affecting their bottom line. In order not to let that happen, you need to have a healthy balance between profitable activities and generosity. Here are some key mistakes that many small businesses make on a regular basis:
Free information. Yes, it is important to provide people with information about your company, especially if you’re just starting out. Therefore, many small businesses regularly send out tons and tons of free brochures or information packages about the products and services they offer. But does the amount of business brought in by them more than offset their costs? Instead of sending these types of materials out randomly, it might be a better idea to selectively send them out to people who have specifically asked for such information.
Free samples. Consumers love receiving freebies such as product samples. But product samples don’t always convert consumers into customers. Handing out product samples can become quite expensive if it is not done strategically. Only make them available to your best prospects.
Donations. Charities will come knocking on your door to ask for donations at one point or another. A certain amount of donations to charity are always tax deductible. But you are not Oxfam and you need to limit your donations to a few selected charities. Learn to say no once in a while.
Employee perks. In a small business, especially if it’s a family business, the culture of paternalism is very strong and employee loyalty is highly valued. Therefore, when times are good, business owners often reward the employees that have stuck with them by giving them huge pay raises and bonuses. But what happens when times get tough and such employee perks are no longer sustainable? What if sustaining them means your profitability will be in the red? When rewarding employees, make sure that you have the ability to sustain those rewards even when business is slow.
When charitable acts start to eat away at your profits, they become bad business practiceA. Be prudent with your generosity if you are still trying to get your business off the ground. If you go out of business, you won’t be in a position to help anyone at all. So stop playing Santa, and focus on the profitability and sustainability of your business.
Stick to the knitting – focus on your core business
Small business owners who are looking to grow their business are often tempted by the idea of diversifying into other products or services. However, a countless number of business ventures fail utterly when their owners decided to diversify away from the core of the original business. Expanding into other product lines or services takes a large amount of time, effort, and resources.
When a business doesn’t have enough of these to handle the expansion, you end up with a situation where both the new and old ventures suffer. This is particularly the case for newly-established small businesses that have very limited resources to begin with. In the early stages of your small business, it is vital that you stay focused on your core business and its true strengths.
In order to make the most out of your limited resources, you need to identify what it is that your business does best and concentrate on it. Related and unrelated endeavours will distract away from what your business does best. Your business may be involved in many things, but there has to be something that it does better than anything else.
The Coca Cola Company, for example, produces a myriad of different drinks, but its main product is undeniably Coke. If the company were to stop selling Coke, it wouldn’t survive. So how do you get clear about what your core business is?
You can start by asking yourself these questions:
1. If you were forced to eliminate all of your products and services, and could only keep the one that is most crucial to the survival of your business, which one would it be?
2. Why would a customer do business with you instead of a competitor? What does he get from you that he can’t get from your competitor or anyone else?
3. What one product or service is so important to your business that you would be willing to lose some customers for it?
4. If your best customer had to deliver a 30-second speech about your company, what would he tell his audience?
Answering these questions will help you to define what your core business is. When you concentrate on your core business, you maximise the value you deliver to your customers by satisfying a critical need. You also build-up your reputation and you’re identified with providing a certain product or service.
Your customers will be attracted to you because they know with certainty that you will deliver what they need. This is the best way to become a leader in your market. So stick to the knitting, and focus on your core business!
Broaden your marketing efforts
This is another important concept. If you currently run one radio commercial or use only your business cards to market your business, you’ll have limited the number of customers you can reach.
By broadening your marketing efforts in several directions, you’ll be able to reach more potential customers – and be able to convince them that they should be purchasing your product or service.
Mix your marketing efforts up. Don’t allow yourself to get stuck in a rut of simply sending out direct mail or advertising through an e-mail marketing campaign. Try something new.
Maybe you could send out a promotional item such as a pen once a month, and then follow up with a direct mailing that advertises a discount on your product or service the following week.
Keep things fresh.
People will see you as innovative – after all you’re always doing something new and they’ll never know what to expect next. This will give your business a reputation for professionalism and creativity, two important traits to customers.
Your clients don’t want to work with stuffy businessmen, but rather creative entrepreneurs who put thought into their customer’s needs and wants.
Marketing can take time to pay off.
However, you will notice that some efforts are more effective than others. Don’t waste your time and, more importantly your money, on marketing tools that clearly aren’t working. If your television commercial hasn’t brought in a single customer or made the phone ring, cancel the ad and book a radio spot instead.
Remember…You will have to experiment to find the best combination of marketing strategies and tools for your business.
