Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

December 19, 2011

The Business Owner’s Greatest Fear

Filed under: Employees and Human Resources — Tags: , — Mike Van Horn @ 6:47 pm

My response to article by Jeff Haden

Two partners joined one of our business owner groups a while back. Their big issue was how to get rid of this one problem manager. They were afraid to fire her. Every month they’d come to the meeting, and the other business owners would ask, “Did you fire her yet?” “No, we didn’t do it this month.” Months dragged on, same question from the group, same response. Got to be a joke.
Then one meeting they came in and announced excitedly, “Guess what! She’s gone!”
“Oh great,” the group responded. “So you finally fired her?”
“No. She quit.”
So my hat’s off to Jeff Haden. This is definitely the entrepreneur’s bugaboo.

 

How to Start a Business

Filed under: Entrepreneurship — Tags: , , — Mike Van Horn @ 5:22 pm

My answer to a question by Brent Russell

Anybody can start a business. It’s pretty easy. Having a profitable business? That’s harder!

First, have something that someone else wants to buy.
Sell it to them for more than it costs you.
Sell enough of it so that the surplus between cost and revenue (i.e., the Gross Profit) is enough to:
— cover your other business costs, like marketing and admin, and
— make you a living.

After you’re sure you’ve got this part down, then start the business officially. Get your business license, tax ID, insurance, rent an office, etc. But spend no overhead before you have to.

When to hire help. To justify hiring, the employee must help the business bring in enough additional revenue so that his/her wages (including payroll taxes) are covered by the Gross Profit from the additional sales. Your employee can do this in several ways:
— Sell more of your products or services
— Do billable work for your customers
— Free you up from admin stuff so that you can sell more
— Bring an essential skill to the team so that everybody’s productivity is raised

Where to get start up or growth capital. First, where you won’t get it from: VCs, bank loan, the government.

Most small business start up capital comes from
— your savings
— personal loan, or 2nd mortgage
— family or friends (very risky)
— initial contract that pays some money up front (very savvy if possible)
— charge it on your credit card (very stupid)

Where your initial sales come from. Knowing you have potential sales out there is the reason to start a business. So if you don’t know the answer to this question, you shouldn’t be starting a business.

 

December 12, 2011

How to Get it All Done This Holiday Season

Filed under: Growth Management,Planning — Tags: , , — Mike Van Horn @ 9:28 pm

“We’re trying hard to balance our busiest work time with the never-ending to-do list. How to stay balanced and sane.” Amy Graver, question on LinkedIn.

My answer. Two levels, Amy.

1. Right now. Hire a personal assistant, someone like a concierge, who will handle all small issues for you with competence and aplomb–both business and personal. If you’re busy doing year-end billable work for your best clients, and you have someone else running around for you, picking up your cleaning, writing addresses for all your holiday cards, replacing the color toner cartridges, dealing with the caterer, getting your invoices out, you will be so-o-o happy. Plus rested and better off financially.

2. Planning ahead. All my clients do an action plan for the coming year. Goals, strategies, and action items. The action items are spread out over a year calendar. But first I have them write in their busy times, vacation times, etc. If holiday season is a crunch time, then they make sure they don’t pile extra things into that period.

The first things to enter are your personal “have a life” things. Why? Because the reason you are in business is to get to do the things you most want in life, including “have a life.” If you don’t do this, you might as well have a J-O-B!

Happy holidays! And may the new year bring you health, prosperity, and relaxation!

The Best Marketing is Keeping Your Current Customers

Filed under: Marketing — Tags: , , — Mike Van Horn @ 3:33 pm

“Your monthly invoices are so high, I think we need to switch to somebody else.” “We liked our old rep. We don’t like this new girl.” “Maybe we’ll bring this in-house. I think my brother-in-law could do this for us.”

Bookkeepers, graphic designers, marketing advisers, etc., all hear this from clients sometimes. And you know they’ll go to so-and-so, who won’t give nearly as good customer service.

Customers come to take you for granted. You do your job so well that you become invisible to them. They lose sight of the value you provide. What to do?

You need to find a way to remind your clients of the value you provide. Re-sell your services without sounding salesy. What sets you apart from the others in the market? What are the special things you’ve done for them over the last month or so? Perhaps note this in your invoice to them.

When’s the last time you talked with them—face to face or by phone—about what other things they may need to have done, things you see that would help them, how they think your service might be improved? What else could you do for them that would be seen as special?

We often come to take our best clients for granted, also. Then we’re shocked when one leaves because they don’t feel their needs are being attended to.

As owner, this customer contact is a key part of your job. But your customer contact people must also do this. You need to motivate and train your people to do this, which they may neglect. I recommend devoting a staff meeting to this issue. Get a discussion going by asking questions like these:

“How can we reinforce our message and our value to our customers?”

“How are we taking clients for granted?”

“What little things would mean a lot to clients? Let’s share some examples of what you’ve done.”

“What do they ask for? How do you respond? Are there things we say ‘no’ to that we should be doing?”

Just having this discussion will energize your committed people. (And why would you keep those who aren’t committed and energized?) They know what you provide is valuable. They know that keeping customers happy keeps your business healthy, and their jobs secure and well-paid.

Reinforce this during subsequent staff meetings. Ask your people to talk about special things they’ve done for customers. One of my clients tracked these reports on a wall chart using “customer happy faces.”

Don’t take this all on yourself (unless you’re a one-person business). It’s essential to involve all your people in demonstrating, by word and deed, your value to customers.

And ask these happy, well-treated customers for referrals to others like themselves.

Would a Free Marketing Plan Help Your Business?

Filed under: Marketing,Planning — Tags: , — Mike Van Horn @ 2:28 pm

My answer to a LinkedIn question by Travis Holt

Whenever I see a “free” offer of something I know is costly, I suspect it’s just an introductory come-on to lead me to purchase something later on. Nothing wrong with that, UNLESS I know it’s something that is too good to be free. Like a marketing plan. I also offer people a free marketing plan*, but it’s something they complete for themselves. If they need my help to complete it, and to come up with a useful guide to their own activities, that’s too much for me to give away.

I think people know this. They want “free” but if you offer too much for free, they are suspicious.

Also, in my experience, people who always want “free” don’t make good customers. I would prefer somebody who said, “You know, I tried to use that free marketing plan, but it just didn’t do it for me. I realize I need to hire somebody to help me think this through. After all, this is the future of my business I’m working on!”

But here’s a fundamental rule, and this may be what you are doing:
“Tell ’em how to do it for themselves, so that they will hire you to do it for ’em.”

*Mine is called “Shortcut to Cash Flow Marketing Plan.” Two pages, 11 questions. Ask me for it, with your name, company name, and email.

 

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