Northwest Georgia - University of Georgia's Small Business Development Center

How to Have an Effective Sales Force

2011-04-04T11:31:00.016-04:00

In business, nothing happens unless there is a sale. With the advent of the internet, websites have reduced the need of a sales force. However, for the foreseeable future, you are still going to need an individual go to your customers and ask for the sale.

Finding individuals that know your products and has the ability to get the customer to agree to purchase your product is absolutely critical to the success of your business.

How do you find these individuals? Unfortunately, there is a large subset of folks that try working in sales when they cannot figure out what they want to do for a living. They will go on until they are fired or decide it is not for them and move on to their next profession. They are a waste of your most valuable resource, your time. As a business owner, how do you find the 'good ones'? The answer is you look for them wherever you can find them.

A business owner I know goes into restaurants, bars and other service related business to find his sales force. If he finds a server giving excellent customer service, he watches them for a while seeing how they handle all types of customers. If the server is very good at what they do, he approaches them and offers them an extremely good dales position. He knows he can teach an individual his product line and techniques on how to sell. However, he has found out the hard way that he can't teach the desire to see to the customers needs and the ability to be 'nice'.

How do you motivate these individuals? First off you need someone that is motivated by both money and customer service. It is very possible for the right individual wit the right product to become wealth. You want to encourage this because if they are making money, so are you. A 'commission only' salesperson are only paid on performance. If they do well, they do very well. If they don't they starve. So they will be more aggressive in making the sale.

A salaried or hourly employees with no commission arrangement are generally the least motivated and effective. They are going to be paid on Friday, no matter how much they sell.

The following links contain more information on finding and managing sales personnel:

http://www.ehow.com/how_5709768_recruit-sales-force.html

http://www.gaebler.com/Hiring-Sales-People.htm

http://www.ehow.com/how_7528855_build-successful-sales-force.html

>http://www.customerthink.com/article/hire_great_sales_reps_avoid_personality_myth

Alternative Financing: Is it right for you?

2011-03-04T10:25:00.008-05:00

These days getting a bank loan is very difficult. What is a business to do? There are other alternatives than the standard model of going to the bank for a loan.

Some financing alternatives are difficult but possible, others are extremely expensive but possible and some are not suggested but possible. With the current economic situation, a business must look at all of its possibilities.

Don't Borrow Any Money, Ever! - This is extremely difficult but possible. You plow earnings back into your business. It is slower, but gives you a solid foundation for true growth of your business. Too may people equate wealth with profit, it is not. Wealth is equity. It is what you actually own after everything else is paid.

"Love Money"- The people that love you (friends and family) lend you the money. there are pitfalls to this however. To quote Dave Ramsey, "whenever you borrow money from your family, somehow the Thanksgiving turkey tastes different". This is generally not a business transaction, it is a relationship transaction. Therefore, unexpected business problems could damage you relationship with the people who love you. Is it worth it?

Home Equity Funding - This involves taking a second mortgage on your home to raise money for your business. This method was very common in the past but with the real estate crisis this method has virtually dried up as a method of raising funds. It may still be an option in the future but less so now.

Trade Credit - To keep your business, some suppliers will give you terms for the things you buy from them. To example, you buy a piece of inventory from a supplier and they will give you terms of 30 days. This is a way of stretching your dollars buy by buying on things on credit. the downside to this is if you don't pay on time, a valuable supplier can cut you off or insist on COD.

Credit Cards - This is a highly dangerous way of financing because of the very high interest rates. I know of very successful multi-million businesses that have started with credit cards, however due to the risks it is not suggested.

Factoring Your Invoices - A factoring company buys your accounts receivable. They will give you a discounted amount immediately and they will do the collections. There are two general types of factoring: with recourse and without recourse. With recourse means that if you accounts receivable is not paid by a certain time they will give it back to you and they will want their money back. without recourse means that you just sell it to them. The downside is that they will discount (pay less than the face value) of the accounts receivable. You will be receiving immediate cash but the cost is very high.

Sell a Percentage of Your Business - Another money of raising money is to sell a percentage of the business for cash. In doing so, you are taking on partner. This is a viable way of raising cash but you are slicing up the pie.

Have Your Customers Pre-Pay - Let's say for example, you are a manufacturing company and an order comes in to build one of your products. You can ask for a percentage up-front before starting the manufacturing process. This is a way of bringing in some cash and assuring payment.

Private Placement Loan - This is becoming more common, especially with the advent of the Internet and very low interest rates available for savings. this entails borrowing money from an individual (non-family) at set terms. At this time, this is a small niche of the lending market but growing.

Non-Bank Lenders-Some non-profit economic development organization will lend money much in the same way a bank will. there may be special lending criteria and limits depending on the non-profit group, but funding is available.

You Have Started Your Business, Now What?

2011-01-05T09:08:00.019-05:00

As you load up your sparkling new shelves with brand new inventory you wonder, now what? You finish up that last piece of code to open your software business, now what? You have been dreaming about starting a business for years and you have finally done it, now what?

Starting off, a new business will have only one goal: SURVIVAL. If the business sells enough, it can stay in business and make a profit. If not, it will close down, lose money for the owners or even force the entrepreneur into bankruptcy. A practical strategy for the the next stage of your business must be quickly formulated. Here are three ways to help.

First, target your market and let your target market know you exist and what you do. This is done by marketing your business to your potential customers. A business can spend a lot of money on advertising and marketing, but is it reaching its pool of potential customers? If you target market is upper middle class 35-50 year old women it would be a waste of money advertising on a TV show that targets 18 to 35 year old male NASCAR racing fans. You must know who your target market is and aim your entire marketing effort towards that target. It is not rocket science.

Second, set an appropriate price point. This can be a tricky task as it is mixed up with psychology, basic human nature and perceived product value. for example, Tiffany & Co. and Wal-Mart both sell watches. Tiffany & Co. profitably sells watches at price points of $20,000 or more, Wal-Mart profitably sells watches with prices starting at about twenty dollars.

A watch is just a mechanical device that divides time into hours, minutes and seconds. So why is there such a huge difference in price? Well a watch is not just a watch. Tiffany & Co. has targeted its market and positioned itself as a provider of very elegant, high-end jewelry. In this segment of the market, price and even mechanical accuracy are less important than design of the watch and the status of the brand. At Wal-Mart you can buy an inexpensive watch that may need replacing in a few years but could be a more accurate time piece. Both companies make money selling watches at different price points because they target very different markets.

Third, find ways to make it easy for your customers to purchase the products or services of your business. This seems straight forward, but it is not. Customers tend to buy more (20 - 50 percent more) if they can use a credit card than if they use cash or a check. Somehow when people use credit cards it does not feel like they are spending 'real money' and therefore spend more. Also consider using companies like PayPal for the ease of use by your customer.

From the moment you open and every moment from that point forward, understand who your customers are, set price points to attract your targeted customers into your business, know the tricks that will keep them interested in your business and coming back.

There is never a straight and simple answer to these questions as the marketplace is a moving target, dependant on the changing wants and needs of the customer. If you need in determining the 'what now' or next steps to building your successful business contact your local University of Georgia's Small Business Development Center at Dalton@georgiasbdc.org for advice and suggestions.

How to Kill Your Business in 6 Easy Steps

2010-12-03T15:21:00.013-05:00

As a cautionary tale, allow me to present the main causes of the vast majority of all business failures. Unfortunately, these causes are alarmingly common and are arranged in descending order of occurrence.

Insufficient Money to Start- This means a business has started out under capitalized and since it generally takes a while to get to the breakeven point, you run out of cash. When you are out of cash, you are out of business!

Uncontrolled or Unexpected Growth- A mentor told me a number of years ago that there are two sure ways of killing a business. One is to do something stupid and the other is growing too fast. Unplanned growth can quickly outstrip the cash you have available to operate your business. When you are out of cash, you are out of business!

Poor Credit Arrangements - When you get terms of 'net 30' from your suppliers, they aren't really looking for the money until the 30th day. After the 30th day they will get rather cranky, but they are not expecting your money until then. If you pay your invoices as soon as it arrives, you could run out of cash. This is especially so if your customers are late in paying you the money they owe to you. Additionally, giving credit to your customers is always a challenge. Your customer could go to a competitor if you don't give terms. However, will they pay you in a timely manner or at all? When you are out of cash, you are out of business!

Poor Inventory Management- Sometimes inexperienced or overly enthusiastic business owners will buy an overabundance of inventory that is way beyond the short term needs of the business. Thus eating up the cash needed to run the day-to-day operations of the business. When you are out of cash, you are out of business!

Over investment in Fixed Assets- An example of this is a construction company that buys a backhoe which may cost $50,000-$80,000 and only uses it a few weeks out of the year. However, they will have to make payments for a $80,000 piece of equipment to just let it sit and rust the rest of the time. When you run out of cash, you are out of business!

Low or Unprofitable Sales- This is obvious. No sales, no cash, big problem. When you are out of cash, you are out of business!

You should be seeing a common theme by now. Good and timely cash flow planning is the main solution to the above business killing problems.

For assistance in determining your businesses cash requirements and developing the necessary strategy to manage your cash flow, contact your University of Georgia's Small Business Development Center. For an appointment please contact: Rand Riedrich at rriedrich@georgiasbdc.org.

Is Bad Customer Service Killing Your Business?

2010-11-05T16:37:00.012-04:00

With the economy in an uproar, customer service should be one of the top priorities a business has today. Sadly, a lot of businesses ignore good customer service at their peril. Your customer has almost unlimited options for the products or services that you sell. If they have a bad experience with your company, in any way, they will go away forever. There is no excuse for bad service.

Studies have indicated that it is ten times harder to get new customers than to retain old ones. Therefore, once your customer has a relationship with you, it is imperative that you treat them like the buds of spring because they are the ones that are actually paying your bills. What will turn your business around could be as easy as just acknowledgment of your customer and their needs. A simple 'hello, how are you' and really meaning it goes a long way in this day and age.

In my readings, I came across a story about how a young man with Down Syndrome working as a grocery bagger turned around a local supermarket's business. This is not rocket science, it doesn't require an expensive advertising campaign, all it takes is the genuine concern for the customer. See the 'Johnny the Bagger' story on the following link. http://www.youtube.com/watch?v=qOZPlt3Ha0Y

If you are running a business, you are going to need to do the following three things, and do them well if you want your customers to keep coming back. First, the business needs to obsess about customer's needs and not just product features. Always think of it from the customer's point of view. It is not about the fancy bells and whistles your product has, but what problems they solve for the customer.

Second, you need to reinforce the brand of your business with every interaction with your customer, not just in advertising and communications. A single good or bad experience could influence a customer a lot more than a lifetime of traditional advertising and marketing.

Third, treat your customer's experience with you company as a core competence, as well as a passion and not just a function of your business. Give them more than they anticipate.

For more tips on customer service, please review the following links:

www.keithmonaghan.com/2009/07/31/marketing-in-tough-times-improving-customer-service/

http://www.forbes.com/2009/12/23/rightnow-customer-service-technology-cio-network-olson.html

http://www.forbes.com/2010/01/12/customer-experience-loyalty-cmo-network-bruce-temkin.html

Surviving The Great Recession

2010-10-29T14:27:00.016-04:00

Some people call it the 'Great Recession', while others call it a 'Mini-Depression'. Either way, running a business right now isn't as fun as it used to be. If you are going to stay open until better economic times arrive, you must 'Recession Proof' your business.

If you are going to survive, you are going to have to go back to basics. The biggest basic pointers are: Keeping track of every penny and spending them very wisely; becoming a crazy person about excellent customer service; don't stop marketing; now is a great time to find and employ superior employees.

Please see the links below for a number of ways that you can keep your business afloat by using strategies that you may have not thought about.

http://www.morebusiness.com/8-ways-recession-proof-business

http://ezinearticles.com/?Top-10-Tips-To-Recession-Proof-Your-Business&id=4967758

What the Banks are Looking for Today

2010-08-04T15:52:00.005-04:00

In this economic downturn, one of the biggest problems that we face is lack of liquidity or the availability of cash to deal with survival, growth and other operating expense issues of running a business. Deserved or not, lately banks have gotten a bad reputation. Some banks, because of their poor lending habits in the past, are simply not able to lend. However, there are many banks that are still lending.

In this new environment, banks that are able to lend have increased the loan requirements to such an extent that many businesses are unable to borrow money like they have in the past. This is generally due to the banking regulators requiring more stringent lending requirements. This manifests itself in higher credit score requirements, different collateralization requirements and higher down payments in order to get a loan, resulting in fewer loans.

The banks, these days, are cash flow lenders. This means that one of the biggest criteria in their decision is if they think the business can pay back the loan with ongoing cash generated by the business. Additionally, they are going to check the business owner's and business' credit history, they are going to want collateralization in case payments cannot be made. They are also going to want an equity injection (down payment). Any problems with the above and the bank cannot and will not loan a business money.

Banks are not investors. Banks are in the business to buy and sell money profitably. They have a responsibility to preserve the capital of the depositors and do not want to take excessive risks with potentially bad loans. It is in their interest to say no to loans that have a chance of going bad.

What does a business owner do if these increased lending requirements have made it difficult to find money? There are other alternatives. These alternatives require a change in attitude and thinking. In this changing economy if you are to survive, you have to 'think outside of the box'.

For a free, confidential analysis of your situation and a discussion of your alternatives, contact Rand Riedrich at the University of Georgia's Northwest Area Small Business Development Center at rriedrich@georgiasbdc.org or (706-272-2700)

Things to Avoid When Selling Your Business

2010-07-12T09:46:00.056-04:00

You have run your business for a number of years and it is now time to sell. There are a lot of potholes you need to avoid when selling your business.

Asking Too Much Money with No Reasonable Rationale for the Price

Typically, the business has been the seller's life for years and the seller thinks it is a diamond in the rough. However, the price boils down to the the business valued as an investment. The business is simply a machine that makes money. The more money that it makes now, (not into the future, that is the buyer's responsibility), the more it is worth to another party.

The price of your business business is not what you owe, what you think the possible profitability will be in the distant future, or how much money you need for a comfortable retirement. The price is what the open market says it is worth today.

Not Seeing the Business Through the Eyes of the Buyer

Although it is tempting to look at one's own business in only the most favorable light, it is very important to recognize the deficiencies of the business, and address them, in order to alleviate any buyer concerns.

Insisting on an All Cash Deal

Unless you have been living under a rock, you know that banks have been very reluctant to lend to small businesses lately. In the current environment, if the business is to sell at all, the seller will probably have to finance a portion of the deal.

Giving Up Running the Business After the Business is Put Up For Sale

During the sales process, you need to run your business as if you were never going to sell it. It may take months to sell and in the meantime if you fall asleep at the wheel, your business could end up in the ditch. This inattention could result in a lower price or keep your business from selling at all.

Waiting Too Long to Sell

Too may owners wait until the last minute to decide to sell their business. Owners wait until the business is down, or they are completely burned out, or their partnership has soured completely. The time to sell is BEFORE emergencies happen - when the business is still good. The old adage is: a business owner should think about and plan the eventual sale immediately after the business is started or purchased.

Seller Not Pre-qualifying a Potential Buyer

Dealing with 'tire kickers' who have no ability to purchase your business is a complete waste of your time. It is a good idea to know the general financial position of the potential buyer before you show them your books and enter into negotiations.

Failure to Sign a Confidentiality Agreement with the Potential Buyer

You will be opening up your books to a buyer and you don't want to have them spreading confidential information about your business all over town. This breach of confidential information could cause some of the following: your customers finding out and go somewhere else; problems with your suppliers; and key employees getting nervous and taking a job with your competitor. All of these factors could lower the price you receive for your business or keep it from selling at all.

How to Hire a Web Designer

2010-06-17T14:23:00.007-04:00

All right, admit it. You are not 17 years old. You may have a working knowledge of the web and have a gut feel of what your web site should look like. However, you have no clue about how to get it to the way you envision it. Does this sound like you?

If you are of a certain age, it may be down right daunting. Who do you choose to design your site: your 17 year old nephew that can do it for a couple hundred bucks; a friend that does it as a way making extra money on the side, when he can get around to it; or a team of true professionals? The correct answer is, It depends! Like any of your marketing endeavors, it boils down to who you target market is and how much you have to spend.

Like using a CPA or an attorney, this activity may be one of those things you may have to leave to the professionals. There are software packages available that allow you to do it yourself. However, the end results are generally pretty amateurish.

Your website is going to be your salesman to the world. What image do you want to send to your current and potential customers? If you want to present a professional images showing competence and implying that you are worth every dime you are going to charge, it needs to be done professionally.

Hopefully, the following links will give you some insight as to what to ask when choosing a web designer.

http://css.dzone.com/news/9-signs-you-shouldnt-hire-web-

http://www.greenbirdmedia.com/how-hire-web-designer

http://www.hooverwebdesign.com/articles/how-to-hire-a-web-designer.html

http://www.cpmmug.com/general/should-you-hire-a-web-designer-or-a-web-developer-for-your-website/

***

Want to Know What Your Customers Think? Use Your Ears!

2010-06-02T15:18:00.011-04:00

If you are like me, you are constantly bombarded by surveys of various sorts, particularly the electronic kind. At first, when this type of technology became available, they were quite handy.

However, a lot of these surveys have been overdone. They are losing their power because people are ignoring them out of 'survey fatigue.'

Some of the best marketing information you will ever get is procured by simply asking your customers "what do you like about this?' or "what don't you like about that?" Pay attention to what your customers say. These people and their preferences are keeping you in business.

For more information on how surveys should be taken and how to go through the clutter of this survey epidemic, please see the following link from Forbes: http://www.forbes.com/2010/02/08/customers-data-software-technology-business-intelligence-survey.html?feed=rss_home

***

Cash Is King

2010-05-12T08:29:00.010-04:00

When you are out of cash, you are out of business. It doesn't matter if your profits are great if you cannot convert those profits into cash. We regularly see businesses making a very good profit on paper go bankrupt because they do not have the cash to pay their bills.

If you can't pay your power bill or payroll today, it doesn't matter how profitable your business is or will be in the future. Unless you have the cash, you are out of business!

You must be proactive. It is your money, after all. Know how much is owed to you and don't be afraid to go after it.

The following are a couple of articles on cash flow management that you may find interesting:

http://www.inc.com/resources/finance/articles/20050601/cashcrisis.html

http://www.inc.com/resources/finance/articles/20040901/10rules.html
...

What Can the Small Business Development Center Do for You and Your Business? Part 2

2010-05-10T10:06:00.004-04:00

We have had another client put something up on YouTube and thought you would like to see it. If we can be of any assistance to you or your business, please feel free to call.

The following YouTube video is from Terry Harris, owner and founder of Rubber Wholesalers. We have been working with him and his business for years. We hope we have contributed, in a small way, to his continuing success. Thanks Terry for the nice things you said!

http://www.youtube.com/watch?v=J7rNpDwah-U

Federal Debt and Deficit

2010-04-08T09:50:00.012-04:00

The national debt and annual budget deficit are both exploding. Its effect on the economy on Main Street is starting to be felt by everyone of us.

I was sent this link a few weeks ago that calculates the debt and deficit figures (in real time) and thought you would like to see it.

Along with the debt and deficit, it calculates, based on Federal Reserve Data, the value of all assets owned by the citizens of the United States (Small Business, Corporate and Personal Assets). About $234,000 per citizen. It compares it to the total US governmental unfunded liabilities (Social Security, Prescription Drug and Medicare Liabilities) which comes out to about $305,000 per citizen.

If this was a client and not our Federal Government, I would advise the client to find a very good bankruptcy attorney, quickly!

It is more than a little scary!

http://usdebtclock.org/

...

What Can the Small Business Development Center Do for You and Your Business?

2010-04-01T09:09:00.010-04:00

We at the University of Georgia's Small Business Development Center spend our time assisting businesses in Northwest Georgia and not blowing our own horn. As it turns out, we don't have to.

I ran across this from one of our clients, Scott Lavelle with Niche Graphic Flooring in Rocky Face, GA, who was kind enough to post this video on YouTube. It gives you a very good idea about what we can do for your business. Thanks Scott !!

http://www.youtube.com/watch?v=2OGguF2x9DU
...

More Information about the New Healthcare Law

2010-03-31T11:21:00.013-04:00

As a business owner, you are undoubtedly confused about how the new Healthcare Law is going to effect your business. I have found an article on how the new law will impact you.

Additionally, I have found an article on the single payer system in Canada that should open your eyes.

They are as follows:

http://asbdc-us.org/Resources/SmallBusDigArticle-HealthCareBill.html

http://www.examiner.com/x-6265-Burlington-Conservative-Examiner~y2009m4d3-Healthcare-is-not-a-human-right
...

The New Healthcare Bill and Your Business

2010-03-23T08:31:00.010-04:00

I will not discuss the politics of the recent Health Care Bill just signed into law. However, you need to be aware of how it will effect your business.

Depending on the size of your business, you will be compelled to provide health insurance to your employees or pay a fine to the federal government. The fine can be as high as $2,000 per employee per year, enforced by the Internal Revenue Service.

The government will form pools where small businesses can join together to negotiate favorable rates with insurance company as a group. The Federal government will offer tax credits to help small businesses pay for the compulsive insurance coverages.

If it survives constitutional challenges, most of the provisions will not kick in for a number of years. As a business owner, you need to start preparations now.

For more information on the new law, please go to an article at CNN Money: http://money.cnn.com/2010/03/22/smallbusiness/small_business_health_reform/index.htm?source=cnn_bin&hpt=Sbin
...

Succession Planning

2010-03-05T14:08:00.030-05:00

Let’s face it, you aren’t going to live forever. Are you going to retire or are you going to drop dead working in your business? You are the driving force and inspiration behind your business, so what will happen to it when you aren't there anymore?

Most business owners want the business they've worked hard to establish to continue, to thrive when they leave, whether it's in the hands of a family member or a new owner. A succession plan will secure the future of your business.

What is a Succession Plan?

A succession plan is a strategy which determines the best way for you to exit your business while ensuring the business continues. The plan determines who will take leadership and/or ownership of the business when you leave. There are two main options to consider when developing a succession plan:

* Retention Planning – keep it in the family! Many owners choose to keep the business in the family when they leave. If you plan to transfer your business to a family member you need to consider the legal obligations as well as the impact on family relationships.

* Buy-Sell Planning - (Selling the Business to External Parties, Like Employees or Businesses). Buy-sell agreements are legally binding contracts which control when owners can sell their interests, who can buy an owner's interest, and at what price. They are mostly used to ensure the smooth continuation of a business after a potentially disruptive event, such as an owner's retirement, incapacity, or death.

Do I Need a Succession Plan?

A succession plan is essential to securing the future of your business. Without a plan, the future of your business will be left to chance once you've gone.

With so much at stake a succession plan is vital and will help you to:

* Maximize the value of your business if you decide to sell;
* Unlock that value by enhancing the marketability of your business;
* Exit your business with maximum profitability and ready for its continued success.

How Do I Develop a Succession Plan?

There are no rules about what your plan should cover or the level of detail it should contain. Among other things your plan will depend on your objectives, family situation, financial position, health and age.

To be successful a plan should be realistic, workable and developed with input from groups and individuals who have an interest or share in the business. You should also talk to your business advisors such as your accountant, lawyer, the Small Business Development Center and others.

Here are a few questions to consider when developing your succession plan: Who will be your successor? How much is your business worth? What sort of management strategy should you adopt for existing staff to ensure a smooth transition? How will your departure affect key business relationship such as suppliers and major customers? Do you need to establish an estate? Do you need provisions for active and non-active family members? How much income do you need to retire/leave the business?

It's important to ensure that your plan is realistic and achievable. Once you've designed the plan, it's a good idea to set a timetable for completion and to schedule key milestones along the way to help keep you and your successors on track towards a smooth transition.

...

Are you a victim of "Friendly Fraud?"

2010-02-22T14:34:00.011-05:00

"Rock Boxes," "Closeting," chargebacks and other forms of consumer misconduct are on the rise. With the explosive growth of on-line commerce, a business owners should be aware. What do these terms mean? Retailers, online or brick and mortar, are seeing suspicious customer claims increasing.

Two articles listed below will provide more information and just might save you from becoming a victim.

Businesses Get Tough on 'Friendly' Fraud
by Pui-Wing Tam, FiLife.com, May 26, 2009

Frendly fraud, a term used to describe consumers trying to "get over" on merchants in little ways, is on the rise and retailers are fighting back. Merchants are fighting a surge in so-called friendly fraud, as more consumers try to get out of paying for their Internet purchases in the recession.

Online jeweler Ice.com Inc. and travel site Expedia Inc. are among companies seeing at least 50% spikes from October in friendly fraud, a term used to describe when a consumer disputes an online charge but doesn't return the item or has already used the product...

Read more about friendly fraud on FiLife.com, here:
http://www.filife.com/stories/businesses-get-tough-on-friendly-fraud
***

Telltale Signs of E-Commerce Fraud
By Ori Eisen, E-Commerce Times, 02/25/09

In a time of economic crisis, there tends to be an increase in the number of people that turn to criminal activity. Although petty crime is usually one area that shows a significant upswing, an additional form of criminal activity on the rise is fraud.

As long as people can get away with it, there will be fraud. However, there are signs you can watch out for that might raise a red flag on potentially fraudulent transactions. Look for questionable street and email addresses as well as multiple orders from the same device...
Read more about preventing all types of ecommerce fraud here: http://www.ecommercetimes.com/story/66278.html?wlc=1243444911

***

10 Rules for Entrepreneurs

2010-01-11T15:33:00.004-05:00

Long time entrepreneur and regular contributor to Inc. magazine, Norm Brodsky has spent nearly 30 years in multiple ventures. In the October issue of Inc., Brodsky shares what his experiences have defined for him as the 10 rules for being a successful entrepreneur. The article is titled Secrets of a $110 Million Dollar Man.

1. Numbers run a business. If you don’t know how to read them, you are flying blind. You don’t have to be the accountant, but you need to understand which numbers are important and why, and then develop the habit of monitoring them closely.

2. A sale isn’t a sale until you collect. The sale does the business no good until the cash it generated is in hand.

3. When your short-term liabilities exceed your short-term assets, you are bankrupt. A certain level of liquidity is necessary to keep the business running in the short-term (12 months or less). A bill collector this year couldn’t care less about the 5-year sales forecast.

4. Forget about shortcuts. Plan and work with forever as the goal.

5. Cash is hard to get and easy to spend. Get it before you spend it.

6. You have no friends in business, only associates. There must be some distinction between your personal life and your business life or both will be soured.

7. Don’t focus on the top line. Gross margin is the most important number on the income statement.

8. Identify your true competitors, and treat them with respect. Competitors can have a strong influence on your reputation.

9. Culture drives a company. In the long run, the boss’s most important job is to define and enforce it.

10. The life plan has to come before the business plan.

To read more on these ten rules, see the entire article available here. For more entrepreneurial advice, check out Norm Brodsky’s column Street Smarts. Brodsky’s most recent book mentioned in this article, The Knack, is now available. This book contains other insights from his entrepreneurial experiences. It was co-authored with Bo Burlingham.

Four Tips for New Media and One for Old

2010-01-05T09:26:00.006-05:00

"I've decided to use Twitter, but how do I tweet?" Tim Berry, author of the BPlan Pro software application, has been tweeting about Twitter etiquette.

18-Point Twitter Etiquette Primer by Tim Berry on May 28, 2009 "I’m beginning to develop a sense of what to do and what not to do with Twitter. Not that I’m an expert, but I’ve been watching and thinking about it. And I’ve come up with a list of dos and don’ts..."
Read more about Twitter Etiquette here***

Meanwhile, Aliza from Web Worker Daily has some great insights into dealing with on line complainers: The Growing Feedback Fiasco May 13th, 2009, Aliza Sherman "What is the obligation that companies have to their customers to listen to — and act on — the feedback they receive from customers?"
Read more about dealing with customer feedback online***

Looking for free stuff for your web site, blog or facebook pages? 30 Places To Find Creative Commons Mediaby Sean P Aune "In this day and age, it seems everything online has a price associated with it. Whether you’re subscribing to a pay site for full articles or clicking on ads in a blog, everything online seems to have money associated with it. Luckily there is still a large, and very healthy, movement online for media files listed under the Creative Commons licenses"
Read more about free content here***

"Viral messaging" is the holy grail of web marketing, but how do you create a message likely to "go virial?" Three Secrets to Make a Message Go Viral by Dan Heath & Chip Heath, May 1, 2009 "Viral doesn't have to be a crazy YouTube video -- Here's our CEO on nitrous! Start thinking about emotion, public service, and triggers. We didn't say it'd be easy; in fact, it might require you to rethink the way you do business. But if it works for scissors and veggie-oil-fueled buses, it'll work for you."
Duct Tape marketing ideas for viral success***

What about "old media?" Here is a 1991 article with some still-good-ideas tips for working with print media (for as long as it might still be around)...Mastering the Advetorialby Don Lancaster "The first few attempts of most any small scale startup into using high circulation publication advertising are virtually certain to turn out extremely disappointing at best. And an outright disaster at worst."
Read more about getting free publicity from old media here***

Something To Lighten Your Day

2009-12-04T11:59:00.007-05:00

Running a business can be daunting but you should never lose your sense of humor. For a chuckle, you may recognize some of these things in your life.

10 Reasons Why Entrepreneurs Live Longer

By Jim Randel, December 3, 2009 10:09 AM , The Huffington Post

1. Stress: it may seem counterintuitive, but entrepreneurs - often living under significant time and financial pressures - are less stressed than those in big organizations who have little control over day-to-day activities.

2. Satisfaction: a recent survey of 1,000 workers showed that those with a direct connection between input and output, specifically owners of their own businesses, were decidedly happier in their work.

3. Control: the only jerk an entrepreneur has to answer to is staring back from the mirror.

For the other 7 reasons you will live longer, please read:
http://www.huffingtonpost.com/james-randel/10-reasons-why-entreprene_b_378454.html

Franchise Fiascos and How to Avoid Them

2009-12-02T13:40:00.015-05:00

No doubt about it, franchises are seen as a far less risky business opportunity than the typical ad hoc start up - but just exactly does "far less risky" really mean? Not much, it turns out, as the articles below spell out in excruciating detail.

Top 15 Franchise Failures
by Katie Adams, Friday, October 30, 2009

"The recession has hit franchise owners particularly hard, with the Small Business Administration (SBA) reporting record loan default rates for 2008-2009... Sorting through the 2009 Franchise Coleman Report we were able to determine the franchises that had the highest SBA loan failure rates in 2008."

Read more:
http://antipaper.wordpress.com/2009/11/02/investopediayahoo-finance-top-15-franchise-failures/
***

Five Reasons Why Franchises Fail - Franchise Failure Rates

Posted by GlobalBX Staff on 07/27/09

"For people who want to open a business they can call their own, the option of buying a franchise is clearly one of the best possible routes to take. Franchises offer instant brand recognition, a proven operating system developed over many years, and plenty of corporate support. But not everything is flowers and puppy dogs in the franchise world. There is always the prospect of a franchise failure, and the smart entrepreneur should always look at the down side when contemplating any sort business investment."

***

How to Avoid Purchasing a Franchise that Might Fail

By Don Daszkowski, About.com

"Although data demonstrates that there is a better chance of success for new business owners if they begin as a franchisee rather than starting a new business from scratch, there are still some factors to take into consideration before deciding which franchise to invest in."

***

Truth is, there is no easy way to go into business!

The Many Faces of Price

2009-11-30T11:21:00.012-05:00

I see businesses in this area (especially restaurants) using monetary price as a marketing tool. Do your customers and prospects care or even notice?

In other words, is monetary price sensitivity an attribute of your target market or are you just hoping for an easy gain in market share? If you do gain market share, will you gain enough to offset losses caused by the lower price? Are monetary price oriented consumers even the type of customers you want?

Most small businesses realize (some too late) that customers who are seeking a low monetary price are really not the best customers to have. Better to attract customers who value the unique service only you can provide.

More sophisticated marketers compete using non-monetary price, or what it costs a customer - other than money - to buy a product or service. These “prices” include the time spent on shopping, ideological factors and the risk that the product will deliver expected or promised benefit.

Here are some recent examples:Business Week on Supermarkets
Supermarket Strategies: What's New at the Grocer
***

A Biznik article for service providers
Why Low Prices Don’t Attract Clients
***

2006 Harvard business writing on the folly of lowering monetary price
Low Prices = More Customers? Not Always
***

Cautionary item written after the dot com crash
Advice to services firms: Don't lower prices
***

A nice piece from Jack Trout, written during the 1991 recession
Marketing savvy can triumph over tough times
***

The 20 Keys to Online Marketing

2009-11-23T14:43:00.010-05:00

Following are 20 keys to successfully marketing your product, service, and business online.

1. Have a professional, easy-to-navigate, quick-loading design. Hire a professional design firm or at least use a good site template.

2. Have lots of quality related content.

3. Build lots of links to your Web site.

4. Build credibility and rapport.

5. Start an e-mail newsletter with quality content and send it out at least once per month.

6. If you are selling a product, have an affiliate program.

7. Once you have an affiliate program, don't forget to promote it.

8. Do whatever you can do profitably to attract large affiliates and form key strategic alliances.

9. Position yourself advantageously in the search engines.

10. Use cost-per-click (CPC) engines, but make sure you know the lifetime value (LTV) of your customers and that you do return-on-investment (ROI) checks often.

11. Supplement your affiliate advertising with both online and traditional advertising, but track results and always do ROI checks.

12. Advertise using CPM channels to build brand recognition, but put profitability before brand recognition.

13. Offer yourself as a resource to the media as an expert in your niche.

14. Hire a great publicity firm or bring an experienced publicist in-house.

15. Use autoresponders to maintain constant contact with prospective customers.

16. Remember that business is all about relationships and communication. Always work to build more relationships, and once they are built, make sure you are in continuous contact with your prospects, customers, strategic alliances, suppliers, investors, and the media.

17. Encourage word of mouth among your customers.

18. Have superior customer service and have staff to answer all incoming e-mails within 24 hours.

19. Send out periodic e-mail follow-ups making sure your customers are happy and asking them for feedback on your product and the service your company has provided.

20. Blog frequently with quality content.

from the book Zero to One Million by Ryan P. Allisfrom

Obama and the Flim Flam Man

2009-11-02T11:06:00.005-05:00

No, this isn't a political post - as a business person I focus on commerce rather than the body politic. Today's political headlines are providing ample fodder for my least favorite form of commerce - scams. There is nothing like a downturn to bring out the scum-buckets and scam artists.

Regular announcements by the President and press releases from various government offices are providing Americans with hope for a better economy but these same announcements provide a new language for scammers to use to dupe the unwary.

"Get your $12,000 stimulus check," "Stimulus grants for your business," and "Stimulus loans for start-ups" are just a few of the baited phrases the scammers are dangling while angling for YOUR hard earned cash.

Whenever assessing the validity of any offer, just perform this simple test - does money flow from them to you, or is there some form of payment or private information required?Throughout the SBA application process, the applicant is NEVER required to pay any up-front fees.

Here are some more in-depth articles about the scams making the rounds these days:

Beware of Scams Promising Help in Winning Stimulus Money***

Stimulus Prompts Small Business Loan Scams***

BBB Warns Grant Companies Exploit Confusion over Stimulus Bill to Rip Off Consumers***

FTC Consumer Alert - Seeing Through Stimulus Scams

Thinking Outside the Box - Store, That Is

2009-10-12T09:21:00.005-04:00

Retail is a fascinating business but getting into retail is considered somewhat difficult. Finding a location, fixturing and the huge investment needed for inventory serve as significant barriers to entry.

For quite some time now, a somewhat different approach to retail has been flying under the radar. The current economy (especially the difficulty in borrowing) suggests a serious look at what are called "Pop-up stores."

A pop-up store is a small operation set up temporarily to capture a specific audience or target market segment. Limited or consigned inventory that's priced to sell fast, a temporary or mobile facility and lots of loud marketing all make the pop-up store a bit different from the typical retailer.

We generally don't think of these as pop-up stores, but the neighborhood fireworks stand is a perfect example. Other good examples include Halloween and Christmas shops. As the articles listed below indicate, these are only the beginning of what might become a significant retail trend:
***
Pop-Up Stores: All the Rage
The latest trend in retailing: shops that open for a few days in a major city or a mall—and then are goneBusiness Weekby Pallavi Gogoi Four days. That's how much time New Yorkers had to get a piece of the upscale design line Proenza Schouler at discount prices. On Feb. 2, the über-chic discount retail store Target (TGT) popped open a store in lower Manhattan, to display this latest high-fashion-at-low-prices design line. The store then closed on Feb. 5.***

The Pop-Up Store: A Smart Idea for Frugal Times
Christina Scotti, FOXBusiness, Wednesday, December 03, 2008 Jonah Staw, 33 years old, founded Little MissMatched on the oddball notion that socks don't have to match. Since then, he has built this three-year old company, with projected sales of $30 million in 2008, into "a lifestyle brand" that targets tween girls. The sell: being different and imaginative is cool -- and colors definitely do not have to coordinate.***

POP-UP STORES
trendwatching.com, first published in January 2004 If new products can come and go, why can't the stores that display them do the same? Well, you guessed it, retail outlets increasingly do. From gallery-like shopping spaces with one-off exhibitions to mobile units bringing inner city-chic to rural areas, TRENDWATCHING.COM has noticed an increase in temporary retail manifestations around the world.***

Pop-Up Stores Pop Up as Inexpensive Way to Build Buzz
Advertising Age By Natalie Zmuda, August 31, 2009 NEW YORK (AdAge.com) -- A few years ago, when cheap real estate was scarce, pop-up stores were a major investment for marketers. Now temporary stores have emerged as a perfect solution for cash-strapped brands, commission-hungry brokers and landlords faced with a glut of commercial real-estate space.***

Is there a pop up store in your plans? Be sure to do your homework and get information about local ordinances and code compliance, then start planning!

How Can you Raise Prices in this Economy?

2009-10-05T09:00:00.031-04:00

One of the more frustrating aspects of my practice is helping clients understand the importance of price in business success. In tough times, the knee-jerk reaction to regaining customers and market share is often to lower prices. Please don't do that!

First, the last thing any business needs to do during a slow down is to reduce profits when sales are going down. Second, study after study indicates the customer - the very person you are trying to impress with your self-sacrificing "low price" - couldn't care less.

What?? But everyone says they are watching their pennies during this recession - how could customers not care about price? The answer is that sellers and buyers are seldom talking about the same thing when they say the word "price.

"When a Seller Says "Price" they are referring to the shelf price - what customers pay.

When a Customer Says "Price" the customer is talking about the money they spend, the risk they bear and the time it takes (among other things) to complete a purchase. Understanding what a customer means when they say "I want low prices" can mean the difference between success and bankruptcy.

A recent Wall Street Journal article reported on a fascinating consumer test that illustrates this point well:

Why Tie Marketing to Time, Not Money By Kelly Spors, March 24, 2009, 9:07 AM ET"In today’s recession, many small businesses may think it’s wise to tie their marketing to money and value to appeal to cash-strapped consumers. But perhaps they should tie it to something else of considerable value: time."

"A new study by researchers at Stanford Business School, published in the Journal of Consumer Research, found that it’s generally far more lucrative for businesses to reference time and personal experiences in their marketing than focusing on monetary value.""The experiment showed that the sign that stressed time brought in twice as many passersby who ultimately paid twice as much than when the signing stressing money was posted. Those customers who bought with the sign mentioning time also reported liking the lemonade more than the others."***

If any of my readers would like to discuss this is more detail for their business, please call or email and we'll set up an appointment.

Year End Updates from the IRS

2009-09-23T13:17:00.008-04:00

IRS Features Recovery Tax Credit Information now on YouTube and iTunes

To help taxpayers take full advantage of the 2009 tax provisions in the American Recovery and Reinvestment Act, the IRS has launched a YouTube video site. People without an iTunes account can hear those same podcasts, in English and Spanish, on IRS.gov’s Multimedia Center.

http://www.irs.gov/irs/article/0,,id=212289,00.html

***

New IRS Materials Available to Promote Awareness of Recovery Act Tax Benefits

As part of a larger effort to increase the awareness and use of tax benefits available through the American Recovery and Reinvestment Act (Recovery Act), the Internal Revenue Service has announced the availability of a vast array of products that help explain several tax benefits currently available to American families.

http://www.irs.gov/newsroom/article/0,,id=213326,00.html

***

Deadlines Near for Business to Choose Expanded NOL Election

Eligible taxpayers must act soon if they want to take advantage of the expanded business loss carryback option included in this year’s Recovery law. This carryback provision offers small businesses that lost money in 2008 an excellent way to quickly get some much needed cash if they were profitable in previous years.

http://www.irs.gov/newsroom/article/0,,id=213149,00.html

***

While digesting IRS info is not the most exciting way to spend an afternoon, learning more about these programs can really impact the bottom line!

Are You Sorry You Opened?

2009-09-17T10:36:00.005-04:00

Being a business owner has its ups and downs and lately the downs have been extra tough. Through it all, most owners are still happy to be in business. But what if you’re sorry you’re open?

What if the ups don’t seem to be fixing the downs and what if it’s just about impossible to remember when it was fun to come into the shop in the morning?

If you’re sorry you’re open, you just might want to pick up the phone and call your Northwest Georgia SBDC. Many of our clients tell us it’s just nice to have someone to talk to during these difficult times and all of your SBDC services are free and confidential.

If we can find a way to bring the fun back into your business then you will find our time well spent. If we can't see a way to get things back on track then we can talk about the changes, big and small, that can help you get your life back on an even keel. The contact information is listed right below the University of Georgia's SBDC logo on the upper right side of the blog so pick up the phone or send an email - your Northwest Gerogia SBDC is here for you!

Call: (706) 272-2700

Write: rriedrich@georgiasbdc.org

Downturn Turn-offs: Layoffs and Terminations

2009-07-15T15:15:00.008-04:00

As an economic development practitioner I hate to see jobs go away, but employment attrition will likely be a continuing fact of life for some firms this year. In my opinion the only thing worse than a staff reduction is a staff reduction poorly done. If layoffs are unavoidable, make sure your own house is in order (staff properly classified, document and compensated, etc.) before proceeding. If a reduction in force is unavoidable, please to be reading these tips on doing it right.

The Art of Laying People Off

Guy Kawasaki, November 18th, 2008

I hope that you never have to lay off or ﬁre people but the reality is that you will, as you advance in your career. If you are scoffing (“Guy, you are clueless: We’ll never downsize, because we’re growing so fast, and I’ll never make a bad hire”), then you’re my intended reader.

Read more on Laying People Off: http://blog.guykawasaki.com/2006/07/the_art_of_the_.html

Retailers, whats's your sign?

2009-07-15T09:52:00.010-04:00

Sure, it's an old 1970s pick-up line but it bears revisiting during this time of economic challenge. A terrible side effect of an economic slump is the malaise that often accompanies an extended downturn. Because so many things are beyond our control, we forget about the many things we do control - and for retailers, that means signage. Study after study confirms that good store signage - inside and out - can have a huge impact on the bottom line. Please to be enjoying some recent writings on improving your signs and your business!

Shoppers Respond Differently to Store Media
June 18, 2009,
By Barbara Grondin Francella
"The way consumers respond to in-store promotional messages and media is changing, with traditional appeals losing some potency, according to the results of a new poll that surveyed 999 shoppers shortly after completing a shopping trip. In the survey, more shoppers (32 percent) rated in-store signage as "very effective" than they did out-of-store advertising, including television ads, billboards and other media (27 percent). Compared to older shoppers, though, Generation Y consumers (born between 1982 and 2003) were more likely to regard both indoor and outdoor advertising as very effective."Read the rest of Barbra's article in Brandweek, here***

Retail Signange - Tips for increasing sales and service
Debby Swoboda, 9/19/2006
"Signage is one sales promotion effort that is guaranteed to get results. University and wholesale group reports show that better signs increase sales and profits. Surprisingly, many retailers don't devote enough time and attention to this marketing component." Read the rest of Debby's article from DS Marketing Solutions, here***

Effective Retail Signage
By Melanie McIntosh, 2008
"In this day and age of modern computers, ink jet printers and desktop publishing programs, I am still amazed to see store owners that put little effort in to producing quality signage for their stores. Signage is one of the most important ways to convey your message to your customers. Your store name, promotions, pricing, and product information may all be conveyed through signage. Are you getting these messages across effectively?" Read the answer to Melanie's question at sideroad.com, here