Apr 172013
 

happiness, profitable service business, profitable business, repeat customers, happy business owner, ideal customers

In my personal quest to unravel the “happiness equation” I recieved this feedback from a reader of this blog. I had posted an article about happiness on one of my LinkedIn groups. I recieved a few comments and one of comments was:

“In the long run happiness just may stumble upon one who deserves it.”

I will have to admit, that the topic of happiness is one of my favorite to write about. There are so many different opinions and thoughts that people have when discussing this topic. Everyone is interested in finding happiness, but the definition is different for everyone. This naturally creates a different path for everyone, even when we are Continue reading »

 April 17, 2013  Posted by at 5:00 AM Happiness Tagged with: , , ,  No Responses »
Jul 022012
 

marketing, growing small business, spending time instead of money, low cost marketing, marketing budget

 

 

 

 

 

 

If, as a result of the present economic times, you find yourself cutting back heavily on your marketing budget, it does not mean that you also need to cut back on your marketing activities. Marketing is paramount in these times of economic distress.

How then can you keep your marketing efforts alive despite a dwindling fund?

There are many marketing initiatives available that are free of cost or have a minimal cash outlay with a relatively high return that small businesses can effectively employ to remain competitive.

Here are nine such techniques that can help you survive and thrive through the present tough times.

  1. Networking – Networking with local business groups, local ‘service’ groups such as Round Table, Lions etc, or even at your children’s school or the church, etc. can be a great marketing technique that does not cost a thing. Spend your time instead of your money.
  2. Referral policy – Ask your existing customers to recommend you to a friend and, if necessary, give them some form of reward (high perceived value to them, low-cost to you) for doing this.
  3. Targeted Direct Mail – A carefully written letter sent to a targeted list and then followed up to increase response rate can work wonders for your business.
  4. Improved Signage – Improve your signage to cover the services you offer.
  5. Marketing Collateral – Leaflets promoting all your services sent out with invoices or directly to your customer base is a cost-effective marketing technique.
  6. Email Newsletters – While it can cost a bit to set up a template, email newsletters come with only a small cost to use as long as you have the time to write the content yourself. There is no postage associated and these are free to send.
  7. Free Poster Signs – Post signs on your vehicles – you have a free poster site, why not use it!
  8. Internet/Online Marketing – There are a plethora of free/low-cost options available online, such as blogs, social media, membership communities like LinkedIn, Facebook, Twitter, Blogs, Meetup, Yelp etc. where you can market your products and services. YouTube can be used effectively to demonstrate your product and with the help of social media tools, these videos can reach a newer, wider audience.

It is important to remember that axing your marketing budget does not mean that you also minimize your marketing initiatives. The biggest mistake businesses make during a recession is to cut down on their marketing activities. Using these free, low-cost marketing techniques will help your company stay afloat during these tumultuous times.

If you enjoyed this post, I would be grateful if you helped spread the word by emailing it to a friend or sharing it on LinkedIn, Twitter, or Facebook. Thank you!

 July 2, 2012  Posted by at 6:00 AM Growth Tagged with: , ,  No Responses »
Apr 042012
 

 

 

consolidate business loans, cash gap, break-even point, financial, cash flow, conversion rate, gross profit margin, up sell, cross sell, increase prices,

 

Part 1:

So what does Bob Barker and the Price is Right have to do with your service business? The Price is Right in 2007 was named the greatest game show of all time by TV Guide. Bob Barker was the host of the show from 1972-2007, making it the longest-running daytime game show in North American television history.

If you are interested in building a great business you need to be in it for the long haul. You need to be willing to out-live your competition. You need to be interested in being the longest-running service business in your area. In order to successfully accomplish this, in order to become the “Price is Right” of your industry you need to be focused on the key factors that will get you there. The one factor that will help you accomplish this more than any other financial factor is Cash Flow.

Step 1. Understanding cash flow

Let’s begin with a definition: “Cash flow is the ebb and flow of cash in your business.”
Or, here is another one: “Cash flow is the flow of money (cash, checks, electronic debits and credits) in and out of your business.”

Cash flow is an overview of your check book, savings account, and investment account. However, knowledge of those accounts won’t:

Tell you where your cash is heading.
Help you to arrive at any meaningful decisions.
Cash is, “what you take home.” In the interest of emphasizing how important cash is (as opposed to profitability), let’s put that statement another way:

“If you don’t have any profitability you won’t have to pay your taxes. If you don’t have any cash, you can’t pay your taxes.”

“Profitability” is an accounting term of special interest to people who collect your taxes, while “cash” is the money that resides in your cash register and in your checking, savings and investment accounts. Cash flow measures the ebb and flow of that money, the successful measurement and forecasting of which allows the small business owner to make a myriad of important decisions.

Decisions such as:

Do I buy a new computer or software system?
Do I purchase or lease that delivery van?
Do I hire that new salesperson?
Do I bring in extra inventory?
Can I afford to give my special customer an extra 30 days to pay his bill?

3 Factors that affect your cash flow

  • Inventory:

The purchase of Inventory requires an outlay of cash, but that outlay does not appear on the P & L. This is because inventory is an asset, similar to cash, accounts receivable and FF&E, and only appears on your Balance Sheet. A build-up of inventory requires an expenditure of cash. If your inventory has increased in the past month (or whatever your financial statement cycle is), then your cash has decreased by a like amount. The opposite is also true: If your inventory decreases your cash will increase.

  • Accounts Receivable:

Accounts Receivable (AR) is basically cash you have loaned to your customers between the time they receive your products or services and the time they pay their bills. It takes cash to fund those receivables, which means that if the amount of your receivables has increased from one financial statement cycle to the next; your cash has decreased by a like amount.

  • Furniture, Fixtures and Equipment:

Cash spent on FF&E amounts to expenditures for capital goods. Because capital goods have an extended life (as opposed to supplies, for instance, which are generally consumed within a year) they cannot be 100% expensed on your P & L. The amount that can be expensed is called “depreciation” and that amount is determined by various taxing agency regulations.
This means that if you were to purchase a capital item for $20,000 on the first day of your accounting cycle, this would have a negative effect on your cash of $20,000. However, it would only have a $5,000 negative effect on your profitability, assuming that it can be depreciated over four years. This $5,000 shows up as “Depreciation Expense” on your P & L, while $20,000 is deducted from your check book. This is a classic example of the difference between profitability and cash flow.

Part 2:

 

Below you will see a list of strategies that you can do today to help you prepare a plan of action for improving your cash flow situation. If Cash flow is CRITICAL than ACT NOW.

Calculate breakeven points for business and all sales people
Reduce non-income generating expenses by 10%
Increase prices
Review wages as a percentage of sales. If appropriate move people from salaries to performance based pay
Increase conversion rate by training the team in sales
Set a target for increasing your average $ sale and then put in place 5 strategies to help increase it
Ask for help
From suppliers- would they accept a payment arrangement for next 6 months
From team- explain the situation to them and ask for them to rally around and put in 110% effort. Ask for commitment from them to increase productivity and reduce expenses.
Put your tax bills on a payment plan. Much better to be paying a little bit off than nothing and getting a “please explain letter”
From bank manager -consolidate loans including credit cards to reduce interest payment
Reduce all debtors starting with any over 60 days
Reduce owners drawings to minimum amount.
Organize a sale to move slow-moving or outdated stock
Upsell or Cross Sell
Sell like crazy
Set short-term (90 day) sales goals and get by in from the whole team
Sell unwanted assets
Understand Cash Gap concept
Calculate gross profit margin on everything you sell and then focus on the items which are bringing in the most total profit (volume x margin)
Categorise customers into “ABCD”. Focus on the profitable A’s and B’s with your advertising.
Just remember that you are not the first person to experience tight cashflow in business and you definitely won’t be the last.

 

If you enjoyed this post, I would be grateful if you helped spread the word by emailing it to a friend or sharing it on LinkedIn, Twitter, or Facebook. Thank you!

 April 4, 2012  Posted by at 6:00 AM Money Tagged with: , ,  1 Response »
Mar 282012
 

 

 

business owner, team, customers, business, creating leverage, cycle of business,

Below you will see the 4 steps to your personal wheel of fortune.  Let these 4 steps give you a clear vision on how your company is supposed to function and how your company will be the tool to help you reach your goals.

  • Owner takes care of the team.
To be a true business owner you need to be a “self-less employed” owner. Self-less employed means training others to do what you can easily do yourself, but you know that’s not the point… Continue reading »
 March 28, 2012  Posted by at 6:00 AM Growth, Leadership, Money, Team, Time Tagged with: , , , , , ,  No Responses »
Mar 192012
 

opportunity, opportunist, sales role in small business, small business owner, building relationships, growing small business

 

 

 

 

 

 

 

 

The picture above spoke to me the moment I saw this. Do you see yourself in the picture above?

Opportunity is what gets me out of bed in the morning. I live for opportunity. I am always looking for the next opportunity that will come my way. Whether it’s a new customer in my current business, a new business, or investment that gets me excited.

I think opportunity is what makes an entrepreneur an entrepreneur. The desire to pursue opportunity is what separates employees from entrepreneurs.

This opportunity minded personality is what drives our country. Governments don’t create job, entrepreneurs create jobs. If our national and local governments want more jobs, then they should create more entrepreneurs. They should help business owners find opportunity. They should do their best to make our business environments a friendly place to do business. This is just my opinion, take it for what it’s worth.

Are you naturally gifted sales person? Do  you love building relationships that will help your company reach the next level? Most business owners are not aware that the role of a sales person is the most valuable role that you have. Among all the different hats that we business owners have to wear, the role of sales person is the most valuable.

Most owners think that the technical part of the job or the management are the most important roles. However, if you were to calculate it, you will find that your time per hour is most valuable building the new relationships that will build your company. No one can communicate the company’s vision with passion like the owner of the business. This doesn’t mean that you can’t hire a sales person. It simple means that if you want to grow your business, sales is where you need to start. And before you  hire out the sales position you first need to learn and master the skill.

3 ways to know you are an opportunist

  • You love the chase. It feels great to sell and to win your next deal, but the chase is truly what you love.
  • You are always looking for a deal. Even when you’re not in the market to buy.
  • The role of salesman is the most comfortable role that you have in your business.

Are you an opportunist? What do you need to start doing today to become an opportunist and start growing your company?

If you enjoyed this post, I would be grateful if you helped spread the word by emailing it to a friend or sharing it on LinkedIn, Twitter, or Facebook. Thank you!

 March 19, 2012  Posted by at 6:00 AM Growth Tagged with: ,  No Responses »
Feb 092012
 

 

generation x, business coaching, generation y, small business growth

When most people think about investing they automatically think about the market. However, they are missing the boat on what investing truly is. Investing is using your hard-earned money(resource) to create more money(resource). Simply putting your money to work. The days of handing your money to a financial advisor and forgetting about it are over. There is definitely a time and place for that type of investing, but it is not the end all be all.

Those of us who are still in our earning years and who have at least a decade left before retirement. We need to start thinking about the big picture of investing. If you are truly interested in earning a higher return on your money. We need to start thinking about getting our hands a little dirty.   If you are interested in making sure you are in a good financial position come retirement, than you may need to get out of your investing comfort zone. This means investing in areas where there is real stability and a real return.

My parents(baby boomers) invested heavily in the market. This was their retirement.  They put it there and forgot about it. That is they forgot about it until they lost it. They did what the majority did and got what the majority got, when the markets started turning south a few years ago.

As a Gen Xer, I feel the millennial and Gen Xer’s will have investing success with a more diversified approach. Now is the time to acquire your assets. Saving is good, but if you feel comfortable putting your money to work, than put it to work. Some of the investing options that I encourage others to get involved with are.

1. Buying businesses.

For those of you that are unhappy with your current job, or have always thought about starting a business. Now is a great time to tap into your entrepreneurial spirit and start a business. Most people think owning a business is risky. As a business owner you have multiple customers or “bosses.” If you lose a customer here or there it may affect your revenue, but it  isn’t going to put you out of business. However, when you have a job and you lose your job you lose your one customer, your boss. Which results in  you losing 100% of your income when the guy upstairs decides so.  As a business owner I feel much more comfortable being in a position that I have full control of my success.

2.Buying real estate.

Buying residential real estate is very similar to buying a business. In fact I view each of my properties as an individual business with revenue and expenses. I then look at my portfolio as a group of businesses working towards the common goal of debt reduction through full occupancy. I love real estate, it is one of the best business models that I know of. The 3 common ways to make money with real estate are 1. Cash Flow, 2. Appreciation, 3. Tax deductible depreciation.

3. Building your current business into passive income money tree.

Whether you choose the first of the second investing option above, number 3 is how you turn your business or your real estate portfolio into a revenue stream for your retirement years. Build your team, build your systems, pay down your debt, or fix up your property. These are the common ways to turn your business into passive income.

I truly believe that these type of investing options are the best ways to reach your personal goals over the next 15 years. I encourage you to get out of your comfort zone, get involved, and take action.

What are you investing in?

 February 9, 2012  Posted by at 6:00 AM Growth Tagged with: , , ,  1 Response »
Jan 182012
 

business coaching, service coach, managing cash flow, seasonal businesses, other peoples time, other peoples money, leverage, marketing

Below you will see the three most common ways to create leverage in small  business.

1.OPT.

 

Other People’s Time. Creating leverage through others. We achieve this by building a team.

  • Develop a recruiting, hiring, and training process that works consistently.
  • Communicate expectations early and clearly through job descriptions and employee manuals.
  • Manage your team by holding everyone accountable each step of the way.
  • Hire slowly fire quickly.
  • Repeat.

2. OPM

Other People’s Money. Interest is your friend, cash flow is king. One of the key roles that you have as the business owner is to Continue reading »

 January 18, 2012  Posted by at 6:00 AM Growth Tagged with: , , ,  2 Responses »
Dec 222011
 

 

So you want to build a better brand for your company. How clearly is your company’s image currently BRANDED? In order to do this we first must understand the  difference between Marketing, Advertising, and Identification.

In part 1 I want to  look at the 3 Branding tools that make up your company’s brand. In Part 2 we will discuss specific tips  on how to use these tools to help build your company’s brand.

3 Branding tools

1. Marketing
The American Marketing Association defines Marketing as: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” Wow that’s a mouthful.

I believe marketing is the Umbrella over PR, Sales, and Advertising. In this 2 part article I would like to focus on the third area of marketing, Advertising.

2. Advertising is the art of buying customers.  Advertising is just an opportunity for you to buy customers. Step 1 is to have a marketing strategy/plan. Step 2 is to keep track of your advertising and ask customers how they heard of your company. Step 3 is to calculate the acquisition costs of each customer. We do this by dividing the total advertising dollars spent, by the number of customers you acquired for each advertising campaign. Test, measure, and tweak your advertising to continually improve this number.

I believe small businesses need to be focusing on converting prospects into customers. The only people who care about the name of my business is me and maybe my mother. Everyone else along with your prospects are asking themselves…How does this benefit me? What’s in it for me? Make sure all your advertising campaigns reflect this understanding.

3. Identification

Yes, that’s great if you get a few prospects to call because they saw your logo or business name somewhere. Using your logo or business name for identification is a completely different purpose than for advertising purposes. What do you want your audience to feel when they see your logo or business name? Achieving this is 80% of your Brands job.  If they feel appropriate about your brand, they’ll reach out and contact you with the other 20%.

 

 

 December 22, 2011  Posted by at 7:00 AM Growth Tagged with: , , , ,  1 Response »
Dec 212011
 

 

In today’s economy it seems that everybody understands when a company decides not to throw a holiday party. Employee’s understand that times are tough and having a holiday party is just not something that is expected anymore. Most employees of small businesses are just happy to keep their jobs these days.

Yes, I think what we are talking about is the expectation of the holiday party in today’s small business environment. Has the downturn in the economy changed the holiday party landscape for ever? Or is this just a temporary shift in expectations? What do you think? Please comment below.

Did your company throw a holiday party this year? Ya, mine neither. Do you plan on throwing one next year? ha ha ha. We’ll that depends on the expectation now doesn’t it. Personally, I think the businesses that are currently profitable and successful today(2011-12) can expect to blow off the holiday party until the unemployment rate gets back to its historical position. We are good for another 2-3 years.

Now that doesn’t mean that you can be a Grinch for the next 3 years. It means that you can use the dollars towards buying new equipment. It means you can pay down your line of credit a little. It means that you need to start thinking about where you want to be(capacity wise) in 3 years. I believe this is the Gen Xer’s current window of opportunity.

 December 21, 2011  Posted by at 7:00 AM Growth, Team Tagged with: , , , , ,  No Responses »
Dec 152011
 

Branding, Business Coaching, Service Businesses, Build a Better business, Business Planning, Advertising, Marketing, Identifying

 

 

 

 

 

 

 

In Part 1 we discussed some of the dangers when implementing a BRANDING strategy for your small business.

Below are first of 2 Tips from PART 1 on how to Harness the power of branding for your small business without the risk of wasting your hard-earned money.

1. Plan the Work, Work the Plan.

Have a marketing strategy/plan that you document and follow. An example of this would be to add BRAND related items into your annual budget. In January create a new logo. February have professional pictures taken of you, your jobs, and your team. March use the pictures, the new logo, and create a new website.

2. Testing and measuring all your advertising investments.

You can’t manage what you don’t measure. You would be surprised at how many business owners I run into that have no idea of where their customers come from. They really aren’t sure where their leads are coming from. They then wonder where they should invest their marketing dollars. Of course you don’t know where to spend your marketing budget, it’s impossible to know if you aren’t measuring it.  Business is a game.  How do you know if you are winning or loosing if you are not keeping score?

You also may notice that I described advertising as an investment. Advertising is just an opportunity for you to buy customers. Step 1 is to have a marketing strategy/plan. Step 2 is to keep track of your advertising and ask customers how they heard of your company. Step 3 is to calculate the acquisition costs of each customer by dividing the total advertising dollars spent by the number of customers you acquired for each advertising campaign. Test, measure and tweak your advertising to continually improve this number.

 

Part 2. A few more tips you can implement to Harness the power of branding for your small business without the risk of wasting your hard-earned money.

3. ONLY use Low cost and high return ways to build your brand.

An example of this is to use social media, create a Facebook fan page, plan a high-profile event, plan a charity event, give back to the community, hire a PR expert, get your business name in the local paper, and  have them create a small business profile on you and your business. Be aware that these low-cost ways allow you to save money by spending time. Make sure to manage your time and your tasks efficiently.

4. Consistency is key.

Consistency is the key to communicating your message. Before you start blasting your name out there make sure you have all your ducks in a row. Make sure you have your company name and logo finalized. Make sure you are clear on the advantages for your customers on using your service over the competitions. Make sure that your competitive advantage is clearly defined and clearly communicated in your logo and across all your marketing materials. Such marketing materials may or may not include your vehicle signage, google ads, brochures, business cards, and email signatures.

5. Back end Branding.

You will need to back up the branding with quality service. Branding is all about making a name for you and your business. Customers then associate your name with your company name, logo, and colors. A key factor to helping that name spread like wild-fire is to make sure the quality of your service exceeded the customers expectation. Your customers will be more likely to spread the word and give out referrals if you master the delivery of your goods and services while consistently exceeding your customers expectations. Back end branding is often looked over as a key component to the growth of your company.

So, is BRANDING the right strategy for your small business? It can be, just make sure you proceed with caution and follow the tips outlined above.

Do you have any additional tips when implementing a BRANDING strategy? Please comment below, I would love to hear them.

 December 15, 2011  Posted by at 10:00 AM Growth Tagged with: , , ,  1 Response »