Open or Closed?

Sales are very important, but that shouldn’t always be the deciding factor for being in the office

 

Throughout the year, we have many major and minor holidays where businesses have to decide should they open or should they close. This is, of course, not counting the days that your office is already closed or before any weather-related issues make the open or closed decision for you. Closing on Thanksgiving and Christmas are easier decisions compared to Columbus Day or Presidents Day. Holidays are not only important for your employees but it also gives you time to recharge your batteries as well, but over the last 10 years I feel some businesses create a much longer holiday than necessary. I know, I know. Don’t we all work hard enough? Of course we do. However, this is the time to work smart. Business owners traditionally work endless hours ‘in’ their business to only end the day, lock the door and then begin to work ‘on’ their business. Their days start early, usually before many people, and the sun, are up. Arriving at the office a few hours before any employees gives them the ability to get so much more accomplished when the phone isn’t ringing and no one needs anything from them. For this very reason I attempt to start each day between 4 and 5am. In fact, I’m writing this column while many people are in the midst of a great night’s sleep. It’s easy to say the day before or after a holiday could be slow, or the week between Christmas and New Year’s will be soft. If your industry is generally slow during this time maybe you don’t open, but should that mean that no one goes in? Working half the amount of time you’d typically put in, but doing it in a quiet environment, may knock many items off your ‘to-do list’. Do you keep talking about reorganizing the office, cleaning out file cabinets, getting ready for end-of-year and tax time earlier? Here’s your opportunity! Bring in that key employee to get things done you’ve been putting on the ‘when-we-have-time’ list. While the office may be closed doesn’t mean that you ignore a ringing phone. It could be a client or vendor you’ve been waiting to talk with and now you have unlimited time to do that. What a nice change that is… unlimited time to talk with someone. Plus, being caught up on all the ancillary items on your list takes a weight off your mind giving you the time to work on the larger projects you never seem to have the time for. I’m certainly not suggesting to work around the clock, but how many times have you wished for just a few extra hours in the week? Utilizing a half day in the office when you are closed for business may just help you find them.

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Outsourcing – You Can’t Do Everything Yourself

Time is money and if you’re trying to do everything yourself, you may be hurting your business instead of helping it.

 

“No one will care as much as the owner does”…”If I want it done right, I have to do it myself”…”Why would I pay someone else if I am able to do it myself?”

These are just a few examples of the mindset of the small business owner who wants control over every aspect of their business. Why blame them? This is why they went into business in the first place. No more babysitting other people and having to redo projects. Now, all they have to do is try to find the time to squeeze everything in.

Bookkeeping, payroll, web design, collecting delinquent payments, sending hand written thank you notes, creating a social media profile, the list goes on and on. The small business owner wears an infinite number of hats. Must they wear them all?

“As soon as I have more revenue, I’ll gladly pay someone else to do some of these things.”

That’s the famous mentality that can stifle the growth of one’s company. By performing every task both small and large, the small business owner can become a cog in his own business.

Never ending days of tasks that continue to pile up. You rarely leave the office, thus never growing the revenue to the point you wish to. When you decide to call ‘uncle’, you are sometimes so far behind on necessary components that you are completely overwhelmed.

How do you know what to outsource? When people ask me this question, the first thing I suggest is that they focus a majority of their time on revenue generating activities. Any administrative work should be done while the business is closed or by someone else.

The next thing I suggest is that they take a hard look at themselves and their abilities. Outsource anything that’s not in their ‘wheel house’. If you have an accounting background, you may want to do your own bookkeeping on a daily basis. However, even with that knowledge, things pile up quickly and you realize that even if you have the skill set, these are things you don’t want to do.

If you have little or no knowledge about building and maintaining a website, how much effort do you want to put into that, when the goal is that the end result be a product that looks sharp and is compelling to the customer? You are the expert in the business you’ve created. Let other experts take on tasks where you are a novice at best or are tasks that are time consuming and non-revenue generating.

The time that you free up will allow you to work more ‘on’ your business rather than ‘in’ your business, thus creating growth. Utilize the contacts you’ve made via networking in the community to find the partners to outsource to. The true beauty is when you speak with them about your challenges and why you need them to take this piece off of your plate, they just might realize that you are the right person to do the same for them.

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The 30-Second Commute

Being Based Out of a Home Office Comes With its Own Challenges

 

“Must be nice” is what those who work from home hear most often from those around them. What’s better than being able to work in your pajamas and to have 24-hours in which to get 8-hours of work done? That may be what it seems like to those on the outside and it may even be what the business owner assumed it would be like before it all began. In reality, a home office causes many more distractions than an office outside the home. Don’t get me wrong, there are positives aspects to working from home, like being able to work non-traditional hours without having to leave the house. If you want to catch up on administrative tasks and send emails at 3am… the office is right down the hall. The real drawback is that the “office is right down the hall”. The home office blurs the line between “work” and “non-work” time. There’s something about leaving an office, locking the door and saying “I’ll pick up where I left off tomorrow”. The home office means you can pick it up again after dinner or for a quick hour before the kids get up. When you’re at a traditional office, you make a list of things you need to do when you get home, but if you work at home, those things are constantly staring you in the face. Maybe I should throw a load of laundry in. The weather is perfect, should I mow the lawn now and get back to work later? Don’t forget the real time sucker, the non-business phone calls that come in from family and friends who all assume you can talk as long as you want since you set your own schedule.

It’s real easy to get sucked into that routine. What then happens is you feel as if you’re ALWAYS working… because you are. You never close it up for the day or set time limits. After years of having my primary office in the home, here are some suggestions that I’ve found to work:

Create “office time”. Get up, shower, get dressed, enter the office and close the door. No one works effectively in their pajamas. Closing the door means no distractions, making you more productive.

Do not take personal calls during “office time”. You’ll lose the day and wonder where it went. Also, limit the time that you surf the internet. Everyone needs a break, but put in a solid two hours of work at a stretch.

Do not stay home all day! There is time to work and time to meet clients and time to network. That office will provide you with a cocoon-like atmosphere that will eventually suffocate you and your business.

I know these tips may seem like common sense or take the “fun” out of a home office, but it’s called “work”, not “fun” for a reason. Stay focused. Your business will not grow by accident.

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Being Visible

Some forms of networking never change

 

Even though the main focus of my own business is print advertising, I always strongly encourage business owners to seek out a media mix. The first thing I tell anyone is that there is no substitute to being visible in your community. Face to face networking has been around for decades, but with the rise of social media, is it still as important as it used to be? Absolutely! In fact, it’s even more vital now than ever before. It’s the component that separates the business owner that considers himself a part of the community from those that simply want to ‘connect’ to as many people as possible.

So, perhaps you’ve vowed to get ‘out there’ more and meet other professionals. Where do you begin? There are more networking options now that at any time in the past. You have chambers and business associations seemingly in every town, as well as leads groups, business affiliations for your profession and referral organizations. The first place I always suggest that someone go to is BNI (BNI4Shore.com). BNI is a structured networking organization where each chapter has a single, exclusive seat by profession. There are over 100 chapters in Maryland alone, so there is surely one near you. The meetings are weekly and there are attendance requirements, however there is no better way to make connections with other local professionals and turn those connections into relationships. BNI will assist in your ability to create a strong ‘elevator speech’ as well as work on your longer presentation skills. This organization is built around relationships and quality referrals. Once in a chapter, you will meet others who can make suggestions on how to grow your business. They may even invite you to other associations in which they are involved.

The Chamber of Commerce is a very big component to any business community. They differ from one to another, with each offering many networking opportunities. Each month, there are events at all times of the day. If evenings are better than mornings, there will be events that are available to you. Many Chambers also have monthly women’s lunches that are very successful. Within many Chambers there are also committees that you can get involved in as a way to give back to the Chamber and your community.

Civic associations such as Rotary and Kiwanis are also wonderful and provide you with the opportunity to network while having the focus of the organization being more charitable than anything else.

Jump in, but start small and then add one additional component at a time. Too many people will join everything available, causing them to lose focus on their business and ultimately burn out. Networking must be scheduled into your calendar and you need to have a balance. Your business still comes first because without a successful operation, networking moves down on the priority list. Remember that networking is about building relationships, not about making sales on the spot. I’ve been fortunate to be a member of many networking communities for the past decade. If you are unsure where to start or which organization best fits your business and lifestyle, please contact me. I’m always happy to share and assist.

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Who Wants Referrals?

You Must be Specific to Receive Specific

 

The last couple of weeks, I’ve talked about networking and power partners. A major component of participating in the community and making these connections is to build your business through referrals. We all know exactly the type of customer we’re looking for, don’t we? Perhaps in theory, but all too often people are very general when talking about the type of client they are searching for. An insurance representative (I typically use insurance for examples) can easily say, “I’m looking for anyone with a car or anyone with a home”. Yes, this is true that everybody needs some type of insurance. However, that doesn’t paint a picture in my mind. You need to give the people you’re talking to the ability to “see” what you want.  Instead, that same insurance rep could say “Who do you know that is married and in the beginning stages of planning for a family?” This triggers multiple needs, like the fact that they’ll have to feed more people on the same or less money, so they want to look for ways to save and they might not have thought about life insurance before, but surely they want their child to be provided for in the case of an unlikely event. The specific request of the “new family” paints a picture that a general request does not.

Won’t being specific cause you to lose out on all the “anyone’s” that this person might know? It may seem that way, but good specific referral requests usually leads to more questions, allowing you to talk about other services that you offer. Most of us as business owners offer multiple products, but you can’t talk about everything that you do in thirty seconds. Remember, it’s called an “elevator” speech because you should be able to do it in the time you spend with someone on an elevator. I suggest sticking to the services that provide you with 80% or more of your sales. Sure, you offer other things, but those niche components are what more in depth client meetings and group presentations are for.

If you don’t know what your target market is, then do a little research.  If you’re part of a franchise, it’s likely defined for you because that’s part of their overall marketing strategy. If not, look at your client list from the past year or two. Maybe your largest client is someone you do something very specific for, but is that what you do for the majority of your clients? Create a profile of what your ideal client “looks like”. Think about things like gender, age range, business size, years in existence for their business.

Don’t forget the emotional factor. Tell me how this ideal client “feels” (frustrated, anxious about expanding, overworked from wearing too many hats).  This will create a profile in my mind so when I then meet that perfect referral (chances are I may already know someone who fits your profile), I can put them in contact with you.

Most importantly, until you can do an elevator speech on command, write it down. Create a few different ones for differen times of the year or what fits your business cycle. Practice them. Talk about them with your associates, spouse or friends. Then, tweak from there. The more you utilize the phrases that paint the picture of what you are looking for, the easier it becomes to ask for referrals. Always be ready, you never know when the next person will ask the famous question of “What do you do?”

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Advertising Versus Marketing – Why these two words are not interchangeable

Over the last few weeks I’ve discussed networking in the community and building referrals.  This is essential to any business. However, advertising and marketing must also be a part of your mix.  Many people think that advertising and marketing are the same thing and create a single budget line for the “promotion” of their business. Yes, the end result is the same, which is to build your client base, but these two things are very different. Marketing is the overall strategy of which advertising is a part of. Marketing your business includes memberships to local business organizations, creation of promotional products and collateral material, participating as a vendor in a business expo. These things help keep the name of your business out in the community on an ongoing basis. The likelihood of these strategies assisting in the making of a sale today is not as strong as the advertising portion of the marketing plan. Advertising is a paid, public, non-personal announcement of a persuasive message that presents its products to existing and potential customers.

Again, advertising is only a piece of the pie of your overall marketing strategy, but an extremely important piece, nonetheless. The difficulty comes when deciding how much to spend or how many components does your advertising need to contain. The answer will differ from business to business. Some will say to spend a fixed percentage of gross sales on your overall marketing, although that makes it a real challenge to start a business and spend close to nothing on generating new clients. My suggestion is to have as many components as possible, keeping in mind that the real key is to be sure that it’s affordable long term and can provide you with consistency simultaneously. Sure, we’d all love to buy television commercials and reach the most eyeballs at a given time, but your average small business owner cannot afford that consistently on an ongoing basis. Look at the area that you serve.

Is your goal to attract clients within a three to five mile radius of your business? Then, maybe a direct mailing to the entire local community is a component. Perhaps you are a destination location and serve an upscale clientele. In this case, you have to reach further than the radius around your store and attempt to reach individuals with a certain criteria. In this case, you don’t want to be in every mailbox because this will create a higher percentage of waste.

Whatever elements you choose to utilize, you must reach your potential clients again and again. Doing a direct mail one time and not getting the desired response does not mean that it does not work for your business. There are many opportunities to put your message out to your perspective market. Lastly, don’t be afraid to be first. Just because it seems that “everyone” in your industry markets via a specific medium, that does not mean it will be effective for you. Try new things where your competition does not already have market share. They may end up following you, in which case you’ll need to have your next move in mind.

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Branding vs. Call-to-Action – Why good advertising campaigns have both

Today only…80% off! Entire store must go! How many times have we seen these types of signs in the mall, on the street, in our mailbox or the Sunday paper? They are effective and they bring people into the store. Last week I talked about being consistently present throughout the year in regards to advertising. You can’t run a special sale every week. Well, you can, but you likely would not be able to sustain the low margin returns from doing so. That’s the big difference between branding and call-to-action within your advertising. Branding your name, your company name or your face is what keeps you top of mind.

Think about the majority of McDonald’s commercials that you see. Very few are for specific products at a special price. Most of them are simply reminding you to come into the store. Do the same thing with your business. When you have a few mediums working simultaneously, you should be branding yourself first. Then, at peak times of the year, you may change the focus to prompt the “call now” reasoning. Call-to-action ads generally highlight a specific product or a reduction in pricing or even the reminder to reserve your desired purchase now. I’ll use jewelry as an example. Jewelry stores need to brand themselves all year long, but they also have many peak times for call-to-action like Christmas, Valentine’s Day, Mother’s Day and Mother’s Day.

The key is to be proactive and not reactive, as is the goal with most things in business and in life. Look at your plan every quarter and search for those peak times when you will be offering a special deal. Begin announcing that special at least three weeks prior. Many business owners who are bogged down in the day-to-day become reactive and realize that next week is a peak time. The first thought is to go buy a new medium right now. However, you’re not reaching the public with any anticipation and it may flop. Advertising is a long-term process that needs attention.

So, if call-to-action brings people through the door when you want them, why brand yourself? This is very important because if the public only sees you when you’re running a special, then they will only visit you during those times and wait for you to give them a reason to purchase. The ongoing branding should talk about reasons why a customer should choose you over others in your arena during non-peak times. Part of that branding is through advertising and the rest is through marketing and being visible in your community (see my previous articles that talk about that). If you only reach out via call-to-action at peak times, it will only bring you one type of customer. See next week’s column when I talk about A,B and C customers and how you can plan to attract them all when you need them.

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A, B & C Types of Customers

You have to reach the entire “alphabet” to maximize your sales

 

In my last entry, I talked about branding and call-to-action in your advertising so that you consistently are reaching your audience. However, we all have many different customer profiles. They all have separate reasons for purchasing. Can you reach them all simultaneously? Sadly, the answer is no. However, you do need to reach them all so that all of them understand that your business meets the needs most important to them.

The “A” customer: The toughest to get, but the most vital to long term success. This customer buys from you and it’s not about the price. They buy on service, quality, name recognition, the fact that you are an established business and most importantly by referral. These types of customers aren’t shopping around. They are working with you because they trust you and know that you stand behind your work and are accessible when they have a question. I have a few people that I work with that fall in this category. When I need something additional, I never wonder what someone else will charge me. This is because the past experience that I’ve had is that compelling. What makes a nice difference to me is that when I call, the owner answers the phone. This does not mean that these businesses are small, but I have a direct line to the individual that I deem is important. When you are marketing to draw new customers from this group to you, they are not excited about bells and whistles or the great sale that you’re about to have. These perspective clients likely have someone they deal with in your field, but the service or quality isn’t what it used to be so they are keeping their ears open. They’ll ask those that they trust who they recommend. They want to know that you will treat them the same on a large purchase and a small one. I, for one, have always adopted the philosophy that many small clients equals one large one. Don’t discount the “A” customer based on their size today. They just may grow along with you if you treat them right.

The “B” customer: This is the group with the majority of potential clients. They like the qualities that the “A” customer looks for, however they are also looking at the price associated with the service and quality. They are willing to take a little less on the intangibles if they can have even more off of the price. To reach this group, you must stay top-of-mind by keeping your branding strong consistently. When they are looking for another firm to call, you want to be on the list. A first-time purchase special or some unique added value can be enough for them to give you a try. What you do with it from there is up to you. The “B” customer can become the “A” customer over time, but it’s not instantaneous. This customer watches things like small increases in pricing or the fact that fresh coffee used to be offered in the lobby, but not anymore.

The “C” customer: If the “C” stands for anything, it would stand for “coupon”. These clients make purchases based on price first and foremost. They will come in when you have a deep discount and are not concerned with a brand of an item. These customers love the businesses in saturated markets such as restaurants & oil changes. When a business is in an overly saturated market, the real factor that differentiates them from their competitors are the pricing specials. When you have to move product, put it on sale & this group will flock to your store. However, don’t expect them to come back next week when you have all new product in at the regular price. This customer is important, but the chances of turning them into an “A” or “B” customer is very small. Also remember that the margin that you make off of this customer is the smallest one. If all you attract are the “C” customers, it’s hard to sustain your business in the long term.

In all of your advertising, you want to be sure that you are branding & setting yourself apart from others that do what you do. That is the most important component of your marketing. If you are couponing too much, your client base begins to change. The “A” customer thinks you’re “cheap” and may not be around forever. A business affected with “couponitis” which instead begins to advertise quality, service, etc., will slowly but surely see the type of customer he gets begin to change, the boom and bust will even out, and the do-or-die deep discounts he had to offer will be able to slowly return to reason without losing sales volume.

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Bartering for Business

It’s the oldest form of payment, but does it make sense for your business?

Bartering for goods and services as opposed to using currency has been going on for thousands of years. With a small business in any economy, there are always perspective clients that will offer you a non-monetary form of payment for the services that you are offering. Does it make sense for your business? As with many things, the answer is “sometimes”. There are a few factors to think about before deciding.

Cash flow is the most important component to any business. If you barter on an unlimited basis and chalk it up to “getting your name out there”, you could end up with what I call “barter heavy and cash poor”. Sure, you may have some free meals at restaurants, a flashy website and a freshly painted bedroom all gained in trade, but none of these things can assist in paying rent or meeting payroll. Unfortunately, the largest bills that you pay on an ongoing basis are not able to be bartered for.

If you move forward with a barter with another business, I always suggest that you write up the same agreement or contract that you would for any client. Note that no cash is exchanging hands and be clear about the expectations from each party. If this is not done, there are two major pitfalls. First, your service may be monthly and the other party’s service is twice a year. You could end up providing months of value on your end and then the other party decides they don’t want to barter anymore. Now, you’ve given away your service for free. The second pitfall is what I call “free has no value”. For example, someone agrees to do your bookkeeping in exchange for your service. Do you get timely responses to your questions? Do you receive your reconciled financials in a timely fashion each month? The sad reality is that there are times when one side in a barter agreement treats their end of the deal as if they are doing you a favor. Since “cash is king” and you don’t pay money for their service, you may go on the “when I have time” list. They quickly forget that your service is being provided as it should be. Now, this agreement is not working and at least one party is dissatisfied.

Another important thought to consider is to only barter for things that would pay for anyway. Would you get a massage every month or your car washed every week if you weren’t in a barter relationship? If not, what are you really gaining? This is why websites and accounting are generally the most desired relationships to barter with. However, remember that the industries that are the most attractive to you likely get offers to barter every day. These businesses need their cash flow to be strong like everyone else.

A full barter exchange may not always be the best way to go. A partial barter/partial cash option may be more optimal or maybe one side is the only one that pays any money because their service is significantly more expensive.

So, when considering a barter for services, think about the health of your business and does the situation save you any money. Don’t de-value the worth of your service. Understand that just because someone offers to barter with you does not mean that you have to accept. Bartering for things you don’t need or don’t have time to use, could just bring you a headache you don’t want.

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Don’t Fail to Plan — Plan for next year while you have the time to do it right

Labor Day weekend is fast approaching.  Yes, that means cookouts, the end of summer and the return to school.  Back to the “everyday” routine.  This last big three day weekend until the Thanksgiving/Christmas holidays come can also be a good time to look at your business.  It’s almost the end of the third quarter and you have enough data to start projecting for next year.  Sure you can wait until December to pan for next year, but some things will cross your path in the fourth quarter and you’ll have to make a decision in regards to committing to them.  So, now is the time.

I am sure that many small business owners feel like this is just another administrative task to put on the pile with all the others until there’s time to do them.  However, goal setting for the next calendar year is too important to lump in with the regular tasks of paying bills, running payroll, invoicing clients, etc.  There’s no better time than right now to sit at your desk uninterrupted and take a look at the past eight months and make some projections going forward.

Goals are a roadmap and are always evolving.  They need not be written in stone, but they must be written down.  Your financial budget comes first.  That will answer some other questions along the way.  Don’t just look at the past year, but the past three if you’ve been in business that long.  Place your P&L’s side by side and look at your expenses.  Have any risen unexpectedly?  Did you have a one-time expense this year that you likely won’t have next year?  If you are looking to make cuts in an area, be realistic & decide if it affects another area.  If you choose to cut staff, you will save on your payroll, but if it means that you will have to be in the store more because of that change, you must allocate some of those saved dollars to marketing.  If you’re in the store more, you’re in the community less.  You still have to tell people that you exist.

Making sure goals are achievable is the hardest part for some people.  We all want to double our sales next year, but is that really obtainable?  Always budget for growth, but be honest with yourself.  What type of growth have you had in the past?  Goals are not limited to budgets, though.  You need a few long term goals for next year and a few short term goals for each quarter.  Maybe it’s training that key employee to handle some new responsibilities.  Maybe it’s attempting to block out a half day per week to shut the door and handle your administrative tasks, so that you aren’t working late at night or every Sunday afternoon.

Revisiting your goals and looking at your actual financials versus your projections is vital.  Do this on a monthly basis after you’ve closed out the prior month.  Did you begin any of your long-term projects?  Where are you compared to where you hoped to be and do you need to make any adjustments?  Of course all of this sounds like a good idea, but it also sounds tedious.  You went into business for many reasons, but I’m sure none of them were to work seemingly day and night until you just couldn’t handle it anymore.  Taking your business to the next level requires a strong plan and following up on that plan.

Utilize resources that are right in front of you.  Ask a close colleague about your goals.  You don’t have to share revenue numbers, but talk about expenses that seem to be constantly on the rise.  Someone you trust just may have a solution that they used that could be helpful.

Do you set long and short term goals for your business and review them on a regular basis?  If so, what do you find most helpful about this process?  If not, how often do you look at your business goals and adjust them?

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