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Posts Tagged ‘Small business’

You Receive Not Because You Ask Not!

When it comes to driving your business, you want to have a couple of  magical things happen:

  1. You want your customers to become even better customers
  2. You want those customers to tell people about you.

This magical one-two punch is what grows your business without inflating your expenses. But to get a handle on those two things requires you get the answers to three things your customers won’t tell you … unless you ask.

No. 1 – Why Do You Enjoy Being My Customer?

Customers continue to do business with you for a number of reasons (good rates, great service, strong rapport), but it’s rare that they’ll volunteer this information without being asked. So ask them.

Find out what you’re doing right, and you can do two things:

  • Do more of the things they like
  • Discover patterns

Get the goods on this question, and you can turn your current customers into do-more-business-with-you customers.

No. 2 – What Else Do You Wish I Did In My Business?

Customers don’t just get products/services from you – they get other products/services before, during and after their transactions with you. Don’t miss this chance to cash in. Find out what else they want, and discover how you can give it to them.

  • If it’s out of your business scope, make deals with trusted vendors and recommend them.

Either way, it’s a chance to tap into more revenue, potentially at a minimum of effort on your part. But you have to ask.

No. 3 – Who Should You Tell About My Business?

People like doing business with you. And chances are high that they know others who would benefit as well … but they won’t volunteer this info off the top of their heads (most of the time). So make it networking with future clients easier by offering incentives.(Be on the lookout for my next post on how to do this)

Give people a good enough reason to spread the word about you, and they surely will. And when your good name becomes a standard of excellence that attracts new customers to you, the effort you put into creating it is money in the bank.

 

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Habits of Highly Effective Networking

For most solo professionals, in-person networking is a significant piece of their ongoing marketing strategy.  Getting out and meeting the right people is often the quickest way to enroll new clients into your program and generate additional revenue.

Though networking can open the door to numerous opportunities, that doesn’t necessarily mean it’s one of your favorite activities. I know a fair number of entrepreneurs who dread networking and consider it to be a necessary “evil” of running a business.

Whether you LOVE networking or do it out of sheer necessity, I’m confident you want to enjoy the best possible results at every opportunity. Here are some  Smart, Simple Tips on how to use this strategy effectively to connect with your ideal clients and create opportunities to grow your business:

1. “Fish in the Right Pond” – Don’t attend a networking event just for the sake of doing so. To get the most bang for your buck (and use your time efficiently) make sure you are ONLY attending networking events where your target clients and referral partners are hanging out. Remember, to be extremely successful in business you can’t market to any and everyone. You need to focus your attention on providing specific solutions to your ideal clients. Which means you need to do targeted, focused networking. You’ll enjoy yourself much more, have better conversations and create more opportunities when you’re talking to people who “get” what you do and are already looking for your product or services.

2. Get your head right – Networking isn’t about selling yourself or pitching your services. It’s about making connections with people, getting to know them, finding out what they need and creating opportunities. Be clear about your objectives BEFORE you attend the event so that you “show up” as a friendly, gracious and helpful resource. If you are a person who doesn’t LOVE the experience of networking, adjust your mindset. A lack of confidence and a negative attitude are highly unattractive and will repel others from wanting to connect with you. Instead of dreading the experience, look forward to the opportunity to meet other people and educate others about what you do. Set the intention before you head out the door that you’re going to have a GREAT experience and enjoy yourself!

3. Have reasonable expectations – Don’t attend the event desperate to close new business on the spot. If you do, each person you meet will “sense” it on you and will likely be turned off your approach. Instead, focus on having meaningful conversations with the people you meet and getting to know them so you can follow-up as appropriate.

4. Resist the urge to “work the room” – I know you’ve seen this. There’s always a guy someone at networking events running around the room, almost tossing their business card at every person they pass. Don’t be that person. Take your time. Enjoy meeting various individuals. Allow the conversations you start to develop and end naturally. You’ll feel much more relaxed and have a better experience. Plus you’ll create deeper connections with the people you meet and have a much easier time following up with them after the event. It is far better to have 4-5 fabulous conversations than to run around the room passing out your card to everyone in your path.

When Customers ATTACK!

When making the decision to become a small business owner there’s a good chance that at some point in your career you’re going to come across a customer or two that might have had an issue with the service that your business provided.  I would imagine that the more conversation that occurs between veteran business owners and newbie business owners the better off everyone will be, or at least customer service concerns might get handled faster.

It’s safe to say that you’re going to need to have tools that you can use in order to address and resolve those customer concerns in the fastest possible manner. Your business relies on it.

1. Respond QUICKLY

No matter what you do make sure that you always have a prompt, lightning fast response. Yes, even if you don’t have a resolution or an answer to the situation you should still make sure that the customer receives a call that let’s them know that their concern is being worked on. A stewing, raging, waiting customer is NEVER a happy one.

2. HOLD Your Tongue

It’s so easy in business, especially as a young manager or newbie small business owner to wanna jump right in and start running your mouth. This sounds nice, but it won’t solve the problem, sit back and shut up and remember that the customer is the one that has a problem with your business. Jumping in before you hear your customer out will only frustrate your customer and it can cause you to miss important details.

3. Professional Reply

Assuming that you actively listened (based on step 2 above) it’s now time for you make it very clear to the customer that you understand their problem, 100% of it. Take the time to repeat back to the customer what they said to you and be sure to focus on the key points to ensure that the customer is comfortable with exactly how much you understand their concern.

4. Resolve the issue

Now that you’ve listened to the customer and displayed good active listening skills it’s time for you to get down to solving the problem, this is the big moment. Once the screaming and yelling stops it’s time to focus on the problem and get it resolved, no matter what it takes.  Overdue it.

5. Follow Up

Once the issue has been resolved it’s always a good practice to follow-up with the customer to ensure that things are still moving in the right direction.

6. Training

Complete your customer resolution process by taking the time to train fellow staff members and associates, doing so will help avoid the same issues in the future.

It’s important to handle every customer service issues as an experience and learn from it, it gives you a chance to improve your skills as a leader and business owner and helps you to mentor others.

Open Your Cash Flow Spigot!

Cash is the lifeblood of small businesses. Cash comes from sales, account receivables collections, and the sale of assets. Unfortunately, as long as more cash is flowing into the company than going out, many owners fail to pay close attention to their cash management plans.

If that sounds like your business, it’s time to take a closer look at your system. One of the major lessons from the recent recession is the importance of having an adequate supply of liquid assets, such as cash and its equivalent, on hand when business slows down.

Implementing efficient cash flow techniques ensures that your company always has enough money to meet its financial obligations. A shortage of cash could lead to embarrassment due to late payments, or in the worst case scenario, bankruptcy. To avoid those problems, check out these tips to make sure your cash flow system is top-notch:

Get organized.

It may sound obvious, but making sure your billing, collections and payables systems are efficiently operating should be your first stop. Use check lists and automatic calendar reminders to keep track of payments that are due.

If the account payment is a receivable, then make sure that you bill promptly, follow up on overdue invoices, and quickly collect on overdue accounts. The longer your customer’s balance remains unpaid, the greater the chance you will not receive full payment.

Offer “carrots” for early or pre-payments.

To the extent possible, get your customers to pay you as early as they can, perhaps by requiring up-front deposits or offering an incentive. “You’d be surprised how many of your customers might be willing to pre-pay for your services or products if you offer a nominal 2-5 percent discount,” Matt Mickiewicz, co-founder of 99designs, tells The Huffington Post.

Give bad customers the boot.

If a customer is consistently late in making payments, cut that person off. This may cause you to have fewer clients at first, but it will allow you to focus on providing optimal services for your loyal customers, thereby building a better reputation, which will more likely pay off in the long run.

Tighten credit requirements.

Offer the best product or service relative to your competitor so that you can obtain the best possible credit conditions, says Isabel M. Isidro, managing editor of PowerHomeBiz.com.

“To improve your cash flow position, you can be more stringent in your credit and terms, requiring more customers to pay cash for their purchases,” says Isidro. “This will increase the cash on hand and reduce the bad-debt expense.”

Be aware of the trade-off to tightening credit, however. A flexible credit policy gives more customers the opportunity to purchase your products or services. Weigh the potential decrease in sales against the benefits of having more cash before making any changes.

Review your expenses

Make sure you are not trying to grow your small business too fast by spending aggressivley. “The largest problem entrepreneurs face is the pull between revenue generating and ‘brand building’ activities which do not generate steady cash flow,” says Kris Ruby, founder of Ruby Media Group LLC. To bridge cash flow gaps, focus on your top 3 revenue generators, recommends Ruby, and put your “brand building” on hold.

RECOVERING ECONOMY – Proceed with Caution

After a long period of economic decline, things are looking up. Consumer spending is on the rise, unemployment rates seem to be going down, and businesses are opening again.

While you may feel like jumping for joy, hiring back your laid-off employees, and sinking significant investment into a shiny new venture… check this out first.

Here are six mistakes to avoid:

Marking up merchandise

“Just because your business is doing better doesn’t mean your customers are doing better,” says Dr. Deb Brown, a business coach based in Deerfield Beach, Florida. “Pay attention to your analysis, your metrics and your reporting, not what is reported on television. Be careful about changing your retail all of a sudden, especially if your customers can’t afford it.”

Hiring like crazy

“Don’t forget the lessons learned in the lean times,” Brown notes. “Just because you can spend more money and hire full-time employees doesn’t necessarily mean that going back to the status quo is your best move. You never know what is going to happen, so it is a good idea to be cautious.”

Jumping into advertising

“Don’t rush to conclusions; just because there are a few positive economic signs, it isn’t time to take out a second mortgage on your home or invest in a full-color ad,” says Brown. “In general, it isn’t wise to make any rash decisions despite the optimism.”

Flying solo

Work with competitors instead of trying to topple them, recommends Rosser.

“Two heads are always better than one, so try to work together with a competitor to compete with a larger company’s market share,” he says. “A lot of big companies have slashed departments and various aspects of their business. This is a great time to team up and go in it together.”

Cutting out customer service training

Your business may have gone lean during hard times, but now that things are coming back, make sure to invest in customer service training, advises Brown.

“Untrained people can kill your customer service scores and hurt your long-term reputation,” she notes. “If you are going to send people into the field, make sure to invest in training. If you can’t afford it, create a mentorship program with your top performers.”

Staying heads down

“Small business owners need to make relationships with other business people and share referrals,” Rosser says. “Go out and join a network marketing group like a local Chamber of Commerce or Coffee Club.”

 

Turning Casual Lookers into Real World Fans

As more and more small businesses embrace social media in general and Facebook in particular, getting online “fans” has become yet another item on the “to-do” list. But beware. While fussing over online fans, businesses sometimes forget that making customers fans in the real world should come first.

Turning someone into a fan of your business means more than convincing them to click a link or check a box online.

In order to get customers or clients to become true fans of your business they have to develop a strong emotional connection similar to one you might feel for your favorite sports teams. Success is all in what you offer and how you offer it. You can get others to connect to your company, product or service by passionately delivering whatever you offer.

The passion part is something that can differentiate a small business. Because so few businesses act with real enthusiasm toward customers, when you apply passion to what you do, people take notice. In short, you develop fans!

Here are four essentials for building real world fans:

1. Offer something unique. Whatever you offer customers can’t be merely better; it has to be different. To gain die-hard fans, offer or do something that no one else dares. Consider Buc-ee’s Beaver in Texas. Customers rave about it online; they write glowing blog posts, Facebook items and Yelp reviews about Buc-ee’s.

And all this for a gas station!  Google it and you’re likely to see a quote like “Buc-ee’s is the coolest gas station I know!” So how does a humble gas station earn such kudos? They’re different. For example, they’ve focused on one thing people dread most about gas stations: the bathrooms. Every Buc-ee’s has super clean, over-sized bathrooms, and full-time attendants to keep them in shape.

Think about what people dislike most about your industry, service or product. What solutions can you offer? It’s a great way to differentiate yourself from your competition and create buzz in the process.

2. Create something valuable. This has two parts. First, you need something valuable to say — a message, tip or other piece of information your customers will want to pass along. Now make it easy for them to share that message.  The rule is this:  When it’s really easy for customers to share stories about your brand, they will.

3. Separate features and benefits. Too many small businesses still highlight product or service features rather than the benefits.  Customer aren’t interested in features – they want the benefits those features bring. Benefits are value statements about your product or service, with an emphasis on what’s in it for the customer. For example, “open 24 hours” is a feature. The benefit to customers is knowing you’ll always be open when they need you.

Small businesses routinely point out features and leave it up to customers and prospects to connect the dots and fill in the benefits blanks.  But remember: You’re an expert on your products and services; they aren’t. When you sell features alone, you’re asking the customer to do all the work.

4. Don’t just talk, act. Often, the things you can do to turn your customers into die-hard fans are right under your nose. They’re things you do daily or simply because you want to provide customers with the service they deserve.

When You Should (and Shouldn’t) Use a Line of Credit (Part 2)

A line of credit is one of the most common and helpful financing tools used by small businesses. Its versatility, though, can be a double-edged sword, because using funds from a line of credit for the wrong reasons can get you in financial trouble. So it’s important to know when a line of credit should be used to meet a financing need — and when it should not.

In a nutshell, funds from a line of credit should be used primarily for short-term needs, such as plugging temporary cash flow gaps, funding accounts receivable, or purchasing additional inventory.

Conversely, a line of credit should not be used for longer-term financing needs, such as the purchase of equipment or property, acquisitions, or major business expansion. A term loan is usually the most appropriate type of financing for these needs. The best uses for a line of credit generally include the following.

  1. Improve cash flow. The most common use of a small business line of credit is to even out the inevitable cash flow peaks and valleys that may be caused by seasonal or industry-specific ups and downs. For example, a company that manufactures Christmas decorations will need cash in the summer to buy materials and then again in the fall to ship goods, although it may not receive payment from its customers until January. The company could use a line of credit to cover its cash shortfall during this time.
  2. Meet short-term working-capital needs. There are times when companies experience cash shortages due to an unforeseen circumstance: a slowdown in collection of receivables, for example, or unanticipated one-time expenses. A line of credit can provide the funds needed to meet day-to-day working-capital requirements on a short-term basis. If your cash flow shortage is longer term (more than a year), your banker may recommend some kind of long-term financing plan instead.
  3. Take advantage of supplier discounts. Sometimes it makes sense to borrow money to take advantage of prompt-payment discounts offered by suppliers, and a line of credit may be the perfect financing vehicle with which to do it. If your cost of funds is less than the discount, then consider drawing down a line of credit to make payment early and then replenishing the line as soon as your cash flow allows.
  4. Take advantage of unexpected opportunities. What if your company has the opportunity to purchase a large quantity of raw materials at fire-sale prices, but you don’t have enough cash on hand to make the deal? Or suppose a customer approaches you with an order for 100,000 widgets but needs them in a week, and you don’t have sufficient resources to fill the order? In these and other scenarios, a line of credit enables you to act quickly.

A line of credit is something you’ll want to have in place before you absolutely need it. If you have a healthy, cash-strong business, now is the time to establish your line of credit.