Tag Archives: Business

Becoming One with Your Customers – A 2-Part Series

Part I: What’s it like being your customer?

Amid the year-end chaos that begins the moment the last piece of Halloween candy was handed out (or eaten surreptitiously at midnight – I won’t judge), it is incredibly beneficial for us as business owners and employees to take a time out. Reserve a few hours away from fighting daily fires. Gather your teams to reflect back and think ahead. Focus everyone’s positive energy on the ultimate source of your success – your customers.

Think about the following with your team: How would you assess the ease of doing business with you? Can your customers (or prospective customers) …

  • Contact who they need when they need them and through their preferred channel?
  • Understand their invoices and pay you conveniently?
  • Know what they are getting and what it’s going to cost?
  • Schedule service within a reasonable time?
  • Make optimal use of your product or service?
  • Find the information they need on your website and understand what you offer?

The little inconveniences may not seem like a big deal but, over time, they can add up to
dissatisfaction and attrition. Take stock and fix the small things, and you are on the path to
stronger relationships!

7 Steps to a Better Business Budget

Many business owners have some expectation of what their expenses and revenues will be in coming months, but most have not taken the time to put together and use a real budget.

In order to better understand your business, and maintain good financial stability – a business owner should consider the following when developing their budget:

 

  1. Look to the past – The past gives a good indication of what your ongoing expenses are, both regular monthly and occasional quarterly or annual expenses. Make sure your expenses are categorized consistently and your finances are up to date, otherwise, you’re not looking at accurate information.  Factor out any one-off expenses or things you don’t expect to have to purchase in the coming year.

 

  1. Look to the future – What are you going to do differently in the coming months? Do you expect sales to grow?  If so, will there be any cost to make that happen or satisfy your orders?  Do you want to hire?  Plan that out.  It’s great to dream big here – think of everything you could possibly want and then prioritize.

 

  1. Create a Spreadsheet – Microsoft Excel, Access, or any spreadsheet platforms will keep your business organized and well maintained. Use this to work up your budget (or email me to get my template sent to you). But once your budget is ‘final’ put it in your accounting system for easier tracking of budget to actuals.

 

  1. Expect the Unexpected – Stuff happens. You know it does.  Add a little padding to areas where you’re likely to need or want it – Office expenses, Equipment, Marketing, or areas you determine.

 

  1. Looking to Cut Costs – Use the budgeting process to see where you’re spending too much money and come up with other options. Energy costs can be astronomical if employees don’t get into a habit of turning off computers when not in use, turning off lights where they aren’t needed, and so forth. Solar programs may be beneficial in the long run to save on energy costs – its environmentally friendly and tax cut incentives are also a plus  Marketing costs can be a black hole if they’re not generating a return.  Make sure your dollars are working for you!

 

  1. Be a Smart Shopper – By shopping around for different suppliers or services, you can find competitive rates for what your business needs to operate. Say you’re a commercial contractor – you’re likely to outsource the mason work for the building clients. Be sure to shop around for quotes on the labor, supplies, and other factors that may come into play with your business. But be careful – just because someone gives you a great price, doesn’t mean their work is quality.

 

  1. Review Your Business Periodically – Make sure you have a great bookkeeper who track daily expenses, profits, revenue and inventory, and then keep track of how you’re doing against your budget. Having an accountant can help with reporting, or a CFO for-hire (like me!) who can help with budgeting and other financial forecasting.

True Cost of Social Media ROI

 

When considering social media marketing for your business, there are two factors you should know: Cost and ROI (Return On Investment). I’ve heard some business owners comment that since Facebook and LinkedIn is free, why should there be a cost, but they don’t consider the time and efforts in  content writing and posting? Others may say that social media is only an option in marketing and not measurable. Of course with any investment you put into your business, there is risk. Understanding Social Media ROI really depends of your company and overall goals.

 

What are your goals?

It’s important to include a marketing plan and goals for any advertising or marketing strategy you create. Is your overall goal to increase followers? Are you looking to sell more product? Increase traffic to your website? To determine social media ROI, it gets down how much you’re currently spending and how much your social media impact matters to your business. This is where you have to make some decisions for your company – for example, one company may spend their money on more traditional forms of advertising, such as print or TV. It could be difficult for a company to switch from traditional marketing to social media. However, social media ad spending may actually get more results in the long run, as they’ve recently surpassed TV ad spending.

 

Tracking ROI

Before you start measuring your social media activities, here is a recommended list to follow:

  • Record website analytics – this could be visitors, referral links, SEO rankings, etc.
  • Track customer satisfaction – take a look at the referrals and recommendations from Facebook, LinkedIn or Google My Business.
  • Make a note of KPI’s (Key Performance Indicators) – what is the cost for customer acquisition, advertising, allocation (what’s this?), average sales per month, etc.? You should pay attention to these changes over time.
  • Pay attention for your current social media profiles – watch any changes with the number of connections you have on LinkedIn, Facebook likes and Instagram followers. Don’t forget about who’s subscribing to your newsletters and reading your blogs.

 

Understanding ROI

It’s crazy to think that many companies don’t know how much they’re actually spending on social media. Take a look at which social media channel is bringing your company the most revenue right now and why. Also look at areas where you can improve. By monitoring these changes, you can move forward with a better game plan and hopefully see more revenue.

 

If you’re not sure which channel is right for you, try and experiment with different platforms such as LinkedIn, Instagram, Facebook or Twitter. A restaurant for example might be benefit better from Instagram – customers will react and engage with beautiful photos of yummy dishes and the inviting ambiance. A mid-size consulting firm may do better having it presence focused on LinkedIn, where they can interact with potential clients and engage in conversation within the industry.

 

Social Media Campaigns

Again, one you define your goals (followers, sales, likes, foot traffic), it will be easier to measure your social media performance. It’s important to remember not to hit every platform at once – this can get time consuming and overwhelming.

After defining your goal, budget and a proposed plan – what would be the best ROI for you? Maybe set a company goal of having 10,000 visitors visit your website. You can then measure using Google My Business and Google Analytics how long someone spent on your site, what they clicked and did it turn into a phone call? Which then turns into a sale.

The impact of your social media campaign should be measurable from the beginning with the value of each link trackable. This will make it easier to see which links are building traffic and promoting engagement.

Although it may take some time and patience to see your ROI add up, there are other factors that can help enhance your social media presence. If you decide you hire a marketing company, make sure you go over your overall social media goals, analytics and that you’re on track for ROI.

Have more questions about fitting social media into your budget? Contact me at judi.otton@growth-cast.com.

Budgeting for SEO – with Guest Blogger Sharon Arena

By Guest Blogger: Sharon Arena of Salty Red Dog Marketing, LLC

Running a small business is not easy.  Most small businesses have limited resources and extremely tight budgets, especially when it comes to sales and marketing.  Search Engine Optimization (SEO) is best defined as the process by which the visibility of your website can be improved within search engines. This means that your website will be more visible on the first few pages on Google or Yahoo, rather than lost in the back.

Some business owners don’t have the budget to spend on web design or an SEO organization, so often they try to do it themselves or.  Expensive SEO does not necessarily mean better, but it should at least indicate a level of care and quality.  Starting off with a small SEO budget could make it more expensive in the long run.  Regardless of the cost of SEO, services for organic searches typically do not yield immediate results.  The time frame for getting results depends on variables such as competition, budget, the demand for product or service and of course the search engines.  Sometimes due to the uncertainty of the outcome, many businesses will try to minimize their risk by allotting small amounts of money from their budget, and not understand the services they are paying for.

Setting up SEO isn’t a one-time event. Search-engine algorithms change constantly to regular research and knowledge is required. As much as we’d like to see instant gratification with our hard work, results often take months to be seen – especially if you’re newer to doing business online. When starting an SEO plan, make sure you have clearly defined goals for your SEO efforts. You’ll need web analytic software in place so you can keep track of what’s working and what’s not. If you decide to pay for an SEO company, make sure you ask a lot of questions. Ask what kind of tactics they use. Ask what are the risks involved?

If you are paying for SEO then the goal should be to see an increase in returns, not just rankings.  Just keep things in perspective – spending a few hundred dollars a month and expecting major results is probably not realistic.  Essentially, when paying for SEO you are paying for time.  SEO can, however, deliver quick results. It can be effective in the short term and help a business who needs immediate results.

It’s important to consider SEO as a marketing campaign.  Sometimes you catch a break in the beginning, but usually, a successful campaign is built over time.  SEO is not so much about the cost, but more as an investment – a crucial piece of your companies marketing plan.  SEO can increase sales without a proportionate increase in marketing costs, which will result in increased profits over time.  Clients are constantly researching online, and are using the internet for comparison with different companies.

SEO plays a vital role in the researching and buying cycle.  Essentially, it’s about being where your potential customers are and guiding them towards what you are offering.  SEO can make your brand stronger, better and well recognized.  As people search for critical and relevant keywords and phrases, they should find you at the top of search results.  SEO has been proven to be one of the most highly cost-effective forms of online marketing, delivering a higher return for every dollar invested.  Having effective SEO can attract thousands, even millions of targeted prospects to your business website.

The residual effect and impact of SEO continue far beyond the time you invest into a campaign because the momentum will sustain for many weeks, often years, making SEO very cost efficient as a marketing choice for your business.

For more information about Sharon Arena or this topic, visit her website at www.saltyreddogmarketing.com.

TEAMS

A team is a way of organizing different people with different goals and plans.  When a team is successful, it funnels the energy of team members for the overall good. Your team is also probably your biggest single expense, so it’s important to get the most out of them!

 

Do You Have The Right People On Your Team?

The goals of a company should be consistent and match what their ultimate vision is. Teamwork is always the most effective when the goal is clear to all employees and spelled out in a way that everyone can understand. Even the most diverse group of people should be able to accomplish their goals in a timely manner if each member of the team understands the point and importance of working together. Successful teams have figured out how to assess themselves and able to check their progress along the way.

 

Having an Employee That Stands Out

In every group and team, strong leadership is important.  This doesn’t mean that a manager needs to bully the team to maintain control, but able to guide the development of the group and potentially educate along the way.  This can be done many different ways, such as by defining specific roles and responsibilities for members of the group, as well as a timeline for the common project so members can understand the place of their role within the timeline.  An effective team leader can recognize how personalities affect team dynamics.  Each person working within a group brings to that group his or her own personality and skill set. Recognizing each person’s style of work, motivation, and level of understanding can help a manager understand how that person fits within the group as a whole. You may have some employees that are better working in a specific group with a specific skill set – and others may be better working independently.

 

Without The Right Team – Your Business Can’t Grow

Unfortunately for all those who contribute positively, there may also be those whose behavior, attitude, or work habits negatively affect the dynamics of the group.   Aggressive personalities that intimidate other group members or those who seem to always be “off-task” are easy to identify.  A manager who recognizes and reacts quickly to these personalities can influence the dynamic of the group in positive ways.  If each member of the group sees his or her contribution as valuable and accountable to the larger group, then less disruption is likely to occur.  Team leaders should work to create an environment that fosters teamwork and collaboration that will empower employees.  Empowered employees will act independently and require minimal direction. They will take responsibility for their actions and be accountable for the results of their work.

 

Make Things Possible!

Training and development are essential for the creation of teams. The right employee training, development, and education can provide dividends for the employer in increased productivity, knowledge, loyalty, and contribution from employees.  Training is the process of teaching and learning specific knowledge or skills to improve performance.  Development focuses on employee growth and future performance.  Training that helps each employee grow their skills and knowledge to better perform their current job is appreciated as a benefit. The opportunity for development increases employee loyalty including retention rate and helps you attract the best possible employees.

Customer Satisfaction

CUSTOMER SATISFACTION

Following up on our last blog about numbers, we will discuss the importance of Customer Satisfaction. A vital part of any business is how your consumers feel about operations.

 

What Are Your Customers Saying About You? 

The most successful companies always include customer feedback into their meetings.  It is no longer an option, but a necessity to review and more importantly understand your customer’s feedback – this will help initiate change and create better customer experiences.  Customer feedback isn’t always specifically about pleasing the customers, but many organizations use it as fuel for new product (or service) development and internal motivation factor as well.  Strong customer satisfaction ratings will usually go to the companies that have well defined and respected internal values. Retention of customers often begins with a high retention rate within the organization.

 

Are They Happy? Or Are There Issues?

When conflicts arise, it’s equally important to limit any damage while mending the relationship with your customer. Employees should demonstrate empathy when handling angry or upset customers, allowing customers to express themselves and respond. By customers demonstrating a clear understanding of their problem, it will help you will resolve as soon as possible. Tracking customer complaints can help prevent future problems as well as identify any issues that may occur within your organization.  Following up is vital to ensure customers received appropriate care and service and a resolution was provided.

 

Are There Other Products & Services to Provide Your Customers?

The internet has created over-educated consumers resulting in fewer impulse buyers than ever before.  The world is now full of consumers who stop and investigate variables they never considered before.  Winning customers over your competition is a delicate balance of your customer knowing they’ve done their due diligence and feeling good about being an educated shopper. However, keep in mind that no matter how intelligent your customers are, or how much expertise you provide them, your business will likely not be remembered for what you said or did, but for how you made customers feel.  Confidence, excitement, trust, reliability; these are all feelings that lead to customer satisfaction.  Even in a successful situation if a completed project fails to elicit a positive emotional response, you’ll almost certainly be an afterthought in that customer’s mind.

 

Are You Getting Referrals?

Earning new customers is important but many businesses often forget about keeping the customers they already have.  Many businesses don’t consider customer service as a cost that requires heavy investment but if you don’t prioritize support and consistently work to deliver excellent service to your customers, then it’s only going to cost money…and eventually customers.  Customers abandon products and services because they get lost, don’t understand something, feel they don’t get value from the product, or simply lose interest.  If your customers stop hearing from you, and you stop helping them get value then you risk losing them in the future.  For most businesses, customers are the largest resource upon which the success of the business depends.

Again, make sure you talk to your customers – or rather, listen!

Four ways to assess your business health

With the start of a new year comes promises to become healthier. There are plenty of ways to assess your physical health (weight, BMI, cholesterol, resting heart rate, blood pressure, etc.)  Why shouldn’t we be looking at our businesses similarly?  When thinking about the health of your business, here are four areas to review when assessing.

Numbers – Of course I have to start here.  Do you know if you are profitable?  Do you know which of your services, products, and clients are more or less profitable?  Do you know what your cash flow need looks like?  Do you know what your customer retention rate is?  And the lifetime value of a customer?  These are all great starting points, and we’ll dive deeper in the coming months.

Customer Satisfaction – Do you know what your customers are thinking and saying about you?  Are they happy?  Thrilled? Or are they liable to jump ship as soon as there’s another alternative?  Are there other products or services that you could be providing them?  Are they referring you to their peers?  Talk to you customers, or rather, listen!

Team – Do you have the right people on your team?  Are they in the right roles?  Do you have a stellar assistant or number two that can take much off your plate? Are your people growing and learning more about your business?  Are you delegating effectively?  Without the right team in place, you can’t grow your business and keep your customers satisfied.  Having the right team makes everything else possible.

Mission/Purpose/Brand – Do you know why you’re in business?  Yes, you’re delivering a specific product or service, but what do you hope to achieve by delivering that product or service?  What’s important to you in achieving that?  I’ve lumped these three different topics into one for a reason – they are what make your company stand out.  If for example – if your mission is to make financial forecasting accessible to any small business owner, you’re going to use basic English in your communications – not a bunch of financial gobbledygook.  You’re also going to offer a reasonably priced product and not something that costs a mint and needs a team of IT specialists to “implement”.  If your mission is to educate the world on the benefits of sustainable farming, you’re going to be investing in programs that further your goals and not just selling the fruits (and vegetables) of your labor.  Keeping your purpose in sight lets you make decisions that are consistent and authentic to who you are.

These are just a few ways to assess the health of your business. Besides numbers, customer satisfaction, team, mission, purpose, and brand – what other areas do you look at when observing your business’s overall health?

As we plan to dive deeper into these topics each week, it’s important to try and answer these questions for the upcoming year.  Making your business strong in all areas will help with the financial and overall success.

How To Price Your Small Business

How To Price Your Small Business

One of the reasons behind small business success, is appropriate pricing. When you price your product accurately, it can really help build the foundation for your business to succeed. The same goes for pricing your product or service incorrectly, your business may face problem that has trouble overcoming.

It’s not an easy task to develop and initiate pricing – in fact, most business owners say it can be one of the toughest tasks to think about. If you’re thinking about revamping your pricing for the new year, here are some tips on getting the price right.

 

  1. Service Costs

Every business has different services costs, and not accounting for them can cause financial issues. It’s important to analyze the cost of each service, to set the maximum profit and reduce any unprofitable services.

One way of pricing your services, are to analyze your total costs. Elements to factor are:

  • Material costs
  • Labor costs
  • Overhead costs

Always be sure to pay attention and never underestimate your labor costs. It happens all the time to small business owners.

 

  1. Competitor Pricing

What are your competitors doing? Sometimes it’s not just about covering your operating costs, but also about where you want to position yourself in the marketplace? Think about where you want your brand – do you want to be a low-end competitor in a high market? Or maybe the high-end competitor? Seeing what your competitors are doing and figure out what will get you the best understanding of the market.

A tip to keep in mind is, don’t try to compete with large store pricing. Most of the time they buy in large volumes so their costs are much less. Try to highlight other values of your company, such as excellent customer service.

 

  1. Understand Conversions

Do you know if you’re actually making a profit on a product or service? For example, if you’re getting only 10% of sales on a product that you’ve introduced – maybe you’re proceed too high. If you consider dropping the price by 15%, you could increase your conversion rate almost by 4.

Basically, never assume things are just ok – always look to see what could be improved and be more profitable.

 

  1. Price Higher Than You Would

Most business owners underprice their services. Not charging enough is a common issue for small businesses because they often don’t have the operational efficiencies of large competitors. The one advantage that a small business has over a larger company, is service – that is more valuable than anything.

Other reasons that can help you justify your higher prices over your competitors are:

  • Satisfaction with Customer Complaints
  • Knowledge of Product or Service
  • Helpful and Friendly Employees
  • Convenient Location
  • Exclusive Products or Services

 

  1. Pricing Below Competition

If you want to stay on the low-end or the competitive pricing, remember that your profit margin will drop – so you will need to think about your costs. To stay low with prices, think about the following:

  • Inexpensive Business Location
  • Inventory Control
  • Limit Product Lines to Fast-Moving Items
  • Design Ads for “Price Specials”
  • Offer Limited Services

This strategy can be successful, but could be difficult to maintain. Remember that your competition can match your lower price.

 

Have questions or need help developing a price plan? Email me at judi.otton@growth-cast.com.

 

 

Understanding Your Balance Sheet

Being able to understand the different types of financial documents and information your business has should help you better understand your financial position. Learning how to decode a balance sheet will help give you the tools you need to make important decisions about your business.

 

A balance sheet, or sometimes called a “statement of financial position” provides a snapshot of your company’s financial position on a given date. This statement gives you details of your assets, liabilities and equity – and is usually prepared at the end of a reporting period, such as a month, quarter or year.

 

The balance sheet is based on the basic accounting equation: Assets (value of everything the business owns) = Liabilities + Owner’s Equity (How the business paid for the assets). Most statements report assets in the left and liabilities and equity detailed on the right. They should both be consistent with the equation – having the same dollar amount for each side.

 

Assets –

Assets are best described as anything your company owns that has some sort of monetary value. Your assets are concrete items, such as cash and inventory – as well as marketable securities. Different types of assets are listed on the balance sheet based on how quickly they can turn into cash if needed.

  • Current Assets – Cash, inventory, accounts receivable, short-term investments and pre-paid expenses.
  • Fixed Assets – Long-term assets such as property and equipment. Cannot be converted into cash for at least one year. Depreciation must be calculated.
  • Other Assets – Intangibles, like patents or trademarks held (only if you know their fair market value).

 

Liabilities –

This is what your business owes, in order of how soon the payment is due. For example, liabilities reflect all the money that your business owes to others – including loans, wages and other debts. Just like assets, liabilities are also categories based on their due date in which you expect to pay them.

  • Current Liabilities – Accounts payable, accrued wages, taxes and interest due within a year.
  • Long-Term Liabilities – Mortgages, bank loans and anything due in more than a year.

 

Owners’ Equity –

Sometimes called net worth or net assets, represents the assets that remain after you deduct what you owe. Valuing a business can be extremely complex – the owners’ equity doesn’t always represent the current market value of your business. Depending on the legal structure of your business, such as if you’re a sole proprietor, in a partnership or have stockholders, can also reflect on your owners’ equity.

  • Owner’s Equity – The money you have left over after selling everything in the company and paying off liabilities.

 

Balancing Act –

Assets and liabilities should “balance” out. Typically, balance sheets include previous data for comparison. Calculating the basic financial ratios can track the performance of your business, identify trends and help implement the strategies of your business.

 

Data from other balance sheets compared with current ones can help guide you to an even more in-depth understanding of your business’ finances. Of course, I am here to help guide you through these complex statements and help manage your business finances for the future.

 

End-of-the-Year Checklist for Small Businesses

I love this time of year!  Thanksgiving is my favorite holiday.  It’s tempting to focus on holidays, traveling and family visits, but tend to forget about your businesses 4th quarter closing. Now is the time of year where your business needs your attention the most, especially when it comes to your finances. Keeping on top of the details between November 1st and January 1st will not only keep you on top of year-end closings but off to a strong start in the New Year.

 

Here is a checklist of what you need to do for your business before the end of the year.

  • Accounting – Make sure you’re maintaining excellent financial records throughout the year. By December, it will be extremely helpful for you and your accountant.
    • Running Reports – Take a look at where your business stands financially, compared to other years. You’ll want to run a profit and loss statement, a balance sheet and a cash flow statement. By looking at these reports will give you a good indication of where you are financially and where you are headed.
    • Analyze Cash Flow Statements – By looking at your cash flow, you can see how your money was spent throughout the year. There is three specific aspect’s that you’ll want to analyze:
      • Operating activities (revenue and expenses); investing activities (assets purchased and assets sold); financial activities (loans and repayments).
    • Vendor Information – Make sure all your vendor information is corrected in your system. Purge or disregard any inaccurate information or if you don’t need to reconnect with them.
    • Reconcile Accounts Receivable – Make sure you have a list of outstanding invoices or which clients still owe you money. Try to get these settled before the end of the year to give next year a fresh start.
    • Double-Check Payroll – Stay on top of any issues which may need your attention. Don’t forget to check any health and life insurance benefits as well.
    • If you have big purchases your considering and have a profit, this is an excellent time to make those purchases and reduce your tax liability.
    • Make an appointment with your accountant to discuss any other tax saving strategies you can take advantage of before year end.

 

  • Information Technology (IT)
    • Back It Up – Make sure all your account files and client files are backed up and secure. Have an external hard drive available or cloud-based system.
    • Back-Up Contacts – If you do most of your business over the phone or computer, make sure you back them up – even if you have to keep an old address book.
    • Download Files – Dropbox is perfect for keeping documents and reports as a back-up. The Golden Rule for data backup is 2:1 – create 2 separate digital copies in 2 separate places and 1 offline copy.
    • Evaluate Your File System – Creating a file-naming system is especially important in businesses, especially those share servers. Make sure any and all files are uniform to the method you prefer.

 

  • Human Resources
    • Bonuses – Decide if you want to offer a bonus or other end-of-year incentive before the end of the year. Doing it before January will impact your profits report.
    • Staffing Needs – Take an inventory of your current staff and determine if you’ll need to hire more employees for the next year. Make sure you budget these additional expenses in the upcoming year.
    • Collect Accomplishments – What milestones have you and your company accomplished? Acknowledge them and your staff for an outstanding performance.

 

  • General Business
    • Inventory – Make sure you conduct an inventory count before the year’s end and make corrections as needed. This is the time to make sure you are not only keeping accurate records but not experiencing any loss.
    • Make New Goals – Have you accomplished any of your goals this year? What about next year? How will your path be different for the upcoming year? Also – write down your financial goals and talk to a professional (like us!) about how to achieve them.
    • Check Your Website – When was the last time you did a thorough look through your website? Make sure every button works, every phone number is correct ad links are working properly. It’s imperative to make sure everything is in working order.

 

Closing out for the end of the year can seem like an overwhelming task – but staying on top of your business goals and finances will make next year a lot easier.

Still have questions? Email me at judi.otton@growth-cast.com to help plan your own check-list.