The Secrets to Improving Profits in Your Small Business
It’s about time to rummage through my spice rack and see what I need to throw away and what I need to replace. I’m sure I’ll find several little jars that have only a small bit of the original herb or spice left. In addition to those, there are probably some very old spices that I bought for one recipe and never used again. I’ll probably throw out the old and nearly empty bottles. They’re taking up room and if I were to just ignore them, every time I looked at my spice rack I’d get the impression that it was full, when in fact, several of the slots were being occupied by herbs and spices that have lost most of their flavor. (I don’t want to go all Food Channel on you, but aromatic herbs and spices lose their seasoning power over time; so don’t let yours sit on your shelves indefinitely!) I’m using this little culinary analogy to illustrate the reasons you should also review your products and services, along with your customer list. They too can go stale, and just like adding a stale herb to your food won’t improve its flavor, stale products, services and customers won’t improve the profits of your small business. Profitable small businesses You need to truly understand how to figure out profit margins and the corresponding sales volume throughout your products, services and customers. A profit wheel can help you get a good idea if your margins are healthy. With it, you first dial in your cost and then it tells you what you should be charging for the different margins you would like to achieve. This will help you find the ideal profit margin for your small business. However, if you want to improve the profits in your small business, you have to really understand your costs and be honest with yourself about them. For example, if you buy something wholesale and resell it, you have costs beyond the mere wholesale price that you pay. Your sales price minus your wholesale cost is your gross profit; but net profit is really what counts in the long run. For example, you move the product around, it takes up space on a shelf, you may package it, you count it at inventory time, your office answers phone calls about it, sometimes it gets returned and more. When you have a product with a poor margin or poor volume, these costs add up and can cause you to lose money on the item, no matter what your wholesale price or gross profit may be. Small business – high profit secrets Worse yet, these dogs are taking up time, energy and space that could be devoted to a new, more profitable item – or more of an item that really makes good money for you. (Maybe if you could warehouse more of your most profitable products, you could purchase them at an even lower cost, expand your territory and improve the profits of your small business more effectively.) Never forget the “lost opportunity” costs. Let’s turn our critical eye to your customers for a moment. Occasionally, small businesses will have some customers that just aren’t the right fit for their business model. On paper you might be making a small profit off these customers,...
read moreThis Week in Small Business: Steer clear of these management and marketing potholes!
Among this week’s collection of excellent curated content are articles that will help you steer clear of some costly marketing and management mistakes. You won’t be able to say that you hadn’t been warned! Leadership, management and productivity If yours is a retail small business, the seven growth tips here will come in very handy for planning and management. And be sure to avoid these potholes that will lose retail customers. Saying you’re sorry is never easy. Customer experience guru Jeanne Bliss makes it a bit easier. Adam Toporek says that it’s possible to keep the customer but lose the customer’s business…or at least the most profitable part of the customer’s business. Are you considering a small business payroll service? These five tips will help you get off to a smooth start. It may sound gross – dogfooding – but you should get an appetite for it if you really want to know what’s going on in your small business. Marketing and sales A great blog post needs a great beginning. The six steps outlined here will help a lot. Here’s what to consider before creating your next small business digital marketing strategy. Remember: Marketing is only the start of the selling process. If you don’t think you’re getting the most marketing punch out of Instagram, here’s how it’s done. Are you taking advantage of the fact that consumers look at their phones 150 times a day? Browse this list of 10 mistakes social media marketers are making on Twitter and be sure you aren’t guilty of any…at least going forward! Should your website be optimized for human eyes or search engines? This article on The Daily Egg sorts it out. Is the era of free social media marketing about to come to an end? Entrepreneurship, startups and innovation Attention stay-at-home moms! Here’s how you can run a successful blog. Need to make a pitch to an angel or other venture capitalist? Check out these tips from some women who have proven track records of success. Politics, government and the economy A bipartisan bill to improve small business access to government contacts is moving through Congress. Here are the highlights....
read moreLet’s Make Fun at Work Day Last All Year Long!
Today is International Fun at Work Day. We’ve tossed out some ideas to spice up the workplace on this special day before, so this time out I want to take a slightly different approach to keeping your small business a fun place to work year around. I think the ideal work environment is one that is a healthy blend of these attributes: The work makes people think and grow. The people and systems provide the support employees need to do their jobs well. People see that what they do is helping achieve the small business’ goals. People enjoy being at work. They smile. So my advice today is to not relegate “fun” solely to International Fun at Work Day, but to make it a goal all year long. Certainly there are “crunch times” when “fun” takes a back seat to “challenging” and “productive,” but these attributes should find their correct balance in your small business throughout the year. To help us think bigger than we might otherwise as small business owners, I’ve been collecting some cool perks that various high-tech startups offer their employees. While some of these are budget busters in the small business setting, they should provide us with some inspiration. I’m also including some lower-cost ideas. Company ski trips. If not a company-wide trip, how about providing season lift passes if you’re in the right location and have employees who hit the slopes regularly? You can find a non-snow equivalent for others folks, or if you’re in a warmer winter area. Build a climbing wall…or provide another challenging physical activity that’s available every day. Create a game room. A pool table, Foosball table or some retro video games would be a lot of fun to have around. Having a standard Xbox, Wii or Play Station set up in a common area would be easy to accomplish. And how about some tournaments? Don’t forget board games or card games. Small business idea: A company that leases retro video games to businesses and rotates them around so a location gets a different machine each month. Hmmm… Ball pit. Google has a big basket filled with little plastic balls employees can wallow around in. Sounds like fun, sort of. Free candy! Okay, this might negate some of the healthy stuff we’re promoting here, but what can I say? People love candy. Event tickets. Is a big game or major concert coming to town? Give away tickets. You can turn this into a regular monthly drawing or contest that could amp up the fun aspect. If so, be sure you do something to limit the number of times one person can win within a certain period of time. Redecorate. Don’t assume that everyone likes your choice of décor. A small business makeover might be fun and also get you some added employee loyalty. Movie nights. Cater an evening where employees, families and significant others all get together to enjoy a fun flick. Pop for theater tickets if you can’t pull this off at your workplace. Start a company team. Small business bowling and softball teams are traditional. How about Ultimate Frisbee, golf or – combining the two – Frisbee golf? Occasional release time for practice would be fun, don’t you think? The ideas I’ve presented here are designed to generally...
read moreDiscover modern matchmaking and make millions! See how it’s possible.
Matchmaker. It’s one of the oldest businesses known to man-and-woman-kind and with the boom in all kinds of dating sites, it’s obviously a service that has been pulled into the Internet Age. But, even some of the best high tech business models that don’t have anything to do with pulling together the lovelorn are actually, at their heart, old-fashioned “matchmaker” operations. For example, what is Uber, if not a matchmaker? It creates mini-weddings between people who can provide rides and people who need rides. In fact, these kinds of matchmaking services are among the hottest Internet ventures going today and if you’re looking for a business opportunity, I suggest you take a look at these kinds of business models. Let me give you a few more examples and then point you in some directions that might help you discover an idea for yourself that you could develop into an online business with the potential of scaling it up. Thumbtack is probably the most “all encompassing” of the online matchmaking business models. It connects service providers with people who need a service performed; however it’s approach to generating revenue is different than Uber. Uber, and others such as Airbnb, take a percent of the fee that is collected for the service provided. Thumbtack charges service providers for the privilege of submitting a quote on a prospective job. Someone looking for a wedding band, for example, might use Thumbtack. The engaged couple would post the date, how long the band would be needed for, the type of music preferred and then sit back and receive bids from various musical groups. On the other side of this arrangement, wedding bands would receive emails about the open invitation for bids, check their schedules and decide if they wanted to submit a bid. Any that decide to pursue the opportunity are charged a small fee. While Thumbtack covers services from wedding bands to math tutoring to plumbers, HomeHero.org specializes in connecting care providers with senior citizens. It makes money by taking a percentage of the care provider’s fee. Note how these business models, in various ways, are doing what a traditional matchmaker would do. They are connecting people, making the connection more convenient and also providing a certain level of quality control and communication. Just as the traditional matchmaker would be able to inform prospective husbands and brides about the eligible people they would be introduced to, these online services let uses see provider ratings. Further, one of the biggest hassles when working with service providers in these areas is collecting and distributing the money. The online-matchmakers take care of those duties when they charge a percentage. However, with the Thumbtack model, payment is arranged directly between the client and service provider. Starting a service like one of these on a local level isn’t too difficult. Frankly, with a WordPress website connected to one of the payment services and a little help from a developer you can get started. The best approach would be to start small and locally and do a lot of the grunt work manually while you test your idea. And to discover ideas, turn to your local Craig’s List or Penny Saver listings. Look for areas where a lot of people are advertising their services. If, for example, you...
read moreThis Week in Small Business: Nothing but practical advice you can start doing today!
Meat and potatoes. That’s how I’d sum up the advice experts served up this week to help small business owners improve their operations. Virtually all the strategies are practical and things you can start doing right now. Dig in. Leadership, management and productivity Listen up, small business retailers: If you’re not delivering personalized digital customer experience, you’re going to lose customers, says Noreen Seebacher in this CMS WiRE speed read article. Big business is losing its allure so small businesses may have an edge in hiring. Greater cybersecurity and better accounting will be two important 2016 small business management trends. Veteran small business writer Rhonda Abrams outlines 10 rules for success. Are you using social media for customer service? Here are 12 reasons you need to go this route. Marketing and sales Jinger Jarrett says that some 2016 marketing trends offer simple growth strategies while you adopt new technologies in your small business. Are you able to leverage sustained storytelling? That could be the key to agile marketing. Do you count yourself among the 78 percent of successful marketers who say automation systems are most responsible for improving profits? Not all links are created equally for the purposes of small business SEO. Avoid the bad ones. Small business owners seem to have a love-hate relationship with Facebook. It will trend more toward love if you avoid these top five Facebook marketing mistakes. Politics, government and the economy The state of small business: U.S. small businesses entered 2016 with stronger sales growth, improved profitability and positive hiring trends, according to recent...
read moreTap into the power of timely sales follow ups
Recently in this space I shared two simple tips for increasing sales: Unless your prospect tells you directly to stop calling, keep calling, and See yourself as a doctor, not as a sales person. Today I want to suggest some more tools so you can do the first of those more easily. What we’re talking about are the best ways to follow up with a sales prospect. This might be a follow up email or a phone call. First let me say that a lot of sales people don’t follow up. The get a prospect on the phone and the prospect says something like, “This isn’t the best month; why not call me in about six weeks?” Often what the sales person hears is, “I don’t want what you’re selling; don’t call again.” Frankly, the sales person may be interpreting the prospect correctly. Many times a prospect just doesn’t want to be harsh with a sales person, so he or she just pushes off the negative encounter to another time, hoping it will be dropped altogether. But if you do follow up in the time frame suggested by the prospect, it can have two very positive impacts: It shows that you are reliable, and It coaxes the prospect into making good on the promise to listen to your proposal at the later date. After all, it was the prospect that essentially gave you the invitation to reconnect at a later time. If you follow up and make the reconnection, then there is some social pressure on the prospect to at least listen to what you have to say. Whether you’re doing a polite follow up email or making a phone call, it won’t happen if you don’t have a good system to remind you when the follow up is due. There are excellent cloud-based customer relationship management systems available, but I know that a lot of small business owners are pinching every penny and they don’t want to take on another recurring bill. If you’re in that group, check out these three email follow up reminder services: com, cc, and Boomerang for Gmail. All three work in similar ways. Let me give you an example. Say you just got off the phone from a prospect who told you to call him in six weeks. You send him an email thanking him for his time, giving information you think is worthwhile, and promising to call back in six weeks. If you were using Followupthen.com, you would next add this as a BCC: 6weeks@followupthen.com. When the six weeks are up, you would receive an email reminder and could then make your follow up call exactly on time, greatly impressing your prospect. These services have a lot more flexibility and applications than my simple example illustrates. If you want everyone who received the email to get the follow up reminder, instead of using the BCC field, you would use the CC field. You can also schedule follow ups at regular intervals, schedule sending an email at a specific time, and much more. Followupthen.com has a decent free plan that lets you use the basic service for as many as 50 emails each month. Boomerang for Gmail has a free plan that offers 10 messages per month, but as its name says, it...
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