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

March 29, 2017

Why You Should Fire Customers, And How

Filed under: Marketing — Tags: , , , — Mike Van Horn @ 10:18 am

With all the marketing focus on getting clients, let us not ignore the clients you should get rid of.

“You’re crazy!” you say, “Why would I want to fire a customer?”

Here’s why:

The client is unprofitable or distracting to the rest of your business. They may have been good in the past, or perhaps you should never have taken them on.

Here’s the thing – it’s possible you’re putting way too much attention and effort into a small a number of customers that are never satisfied. This is at the expense of other customers who are happy and complementary of your work.

When your company is small, you take in any business to build it up. When times are good, perhaps you take on any customer. But as you grow, it’s prudent and profitable to become more selective. And as business slows, you should be less tolerant of marginal or unprofitable customers. They can actually threaten your business.

When to fire a customer:

  • The job is too small, and the cost of serving them takes most of the potential profit.
  • They are too large, and keep insisting that you lower your price — until the work is unprofitable.
  • They are too different. They buy something that you have been selling but you no longer want to sell. For example, a print shop wants to close its graphics department, or a landscape contractor wants to close its maintenance section.
  • The job is too distant. When you had a lot of customers in their area, it was worth serving them; but now that you only have a couple, you actually lose money on them.
  • They are more trouble than they are worth. These customers argue with you, are never satisfied, are slow to pay, or all the above.

Now, obviously it’s not easy to fire a customer. Here are some suggestions to soften the blow:

  • Refer them to someone else that you know would be more appropriate for them. Sending business to someone else may entice that person to send a good referral back to you. However, don’t send problem customers to your good referral sources!
  • Give them some warning. “After this next project, we won’t be able to work with you any more.” Tell them why.
  • Instead of getting rid of a customer, ask yourself how you can turn an undesirable one into a good one?
  • Then when you tell them why you can no longer work with them, they may be able to change something that will make them a good customer.
  • Raise your price. They will either leave, or it becomes profitable and more enjoyable.
  • Change the way you work with them. Instead of 1 on 1, get them into group workshops, or steer them to online programs.
  • Change the terms of your work. Instead of fixed price, charge for your time and materials. Make sure you get change orders for extra work they request. Overcome your timidity and be polite but firm: “Yes! We’d be delighted to do that for you, and it will only cost you an additional…$$.”
  • Require pre-pay or payment by credit card, to cure slow payers.
  • Be the squeaky wheel. Stay on them. Oftentimes we don’t hold clients to the agreements they make with us. We let them slide and then we moan about it. Remind them what the agreement is, and request firmly that they abide by it.

You have nothing to lose by doing any of these things. Bad clients lower profits and distract your business. Since you were going to fire them anyway, they just might work.

March 16, 2017

Marketing—Do I Have to Do It All Myself?

Filed under: Marketing — Tags: , , , , — Mike Van Horn @ 2:17 pm

You’re a busy business owner, you’re up to your ears in scheduling, bookkeeping, and managing people. Do you really have to handle every aspect of marketing, too? Here’s the blunt truth: No one you hire will ever care as much about your business as you do. Period. You can’t clone yourself, but you can put your time and energy where it counts. Here’s why, and how, to delegate your marketing:

Yes, You Do Have to Take the Lead in Marketing

  • It’s your company. You care the most about it.
  • You know it best.
  • You are the most motivated to sell.
  • You got into your business because you are good at marketing and selling your offering.
  • Customers want to connect with you, the owner.

No, You Don’t Have to Be a Marketing Martyr

  • It gets to the point where it’s too much for you to handle—plus do customer work.
  • Doing all the marketing tasks is not the best use of your time.
  • You may not be the best sales person in your company.
  • Parts of the marketing are easy to hand off to others.
  • You don’t have the expertise to handle all the parts.

There Are Some Things Only You Can Do:

  • Set the mission, vision, strategies, goals
  • Build strategic relationships.
  • Choose good people to help you market and sell.
  • Make sure they do what you want.
  • Approve your marketing and promotions.
  • Insist on results, not just effort.
  • Tweak your direction and offering; develop new things.

You Should Never Do Things That . . .

  • You are not good at. You can find better people to do them
  • You can easily hire and delegate to other people.
  • Get in the way of you doing what brings the greatest value to your company

Do this . . .

  1. Make a list of the Marketing tasks you’re good at, and that bring the most value.
  2. Then make a list of the tasks you’re eager to get off your plate.
  3. As you hire people – contractors and in-house, be clear about the tasks you want them to take over, and what you will continue to do.

Your Marketing Job

  • Define your pathway—your overall strategy to reach your vision.
  • Build your marketing team of skilled people who can help you execute your strategy.
  • Orchestrate your team; oversee team performance.
  • Review results, tweak, refine, and change direction when needed.

As the owner, it’s up to you to set the overall vision and define what success looks like. From there on, empower people to make it happen.

Does All This Pertain to a One-Person Business?

As a solopreneur, unless work just falls into your lap, you have to spend a good portion of your time drumming up new business. Plus doing the work. Plus all the admin stuff. How many hours a day do you want to work? (Clue: the max is 24!)

If you have a viable business, you soon discover that it’s worthwhile to hand off pieces to others: website design and maintenance, social media, copywriting, maintaining your marketing database. You notice that you depend on all these others, even though they aren’t your employees. You’re no longer a one-person business.

The option is to stay tiny and run yourself ragged.

March 14, 2017

Are Your Low Prices Driving Away Customers?

Filed under: Marketing,Profit — Mike Van Horn @ 12:49 pm

Do you price too low?

Many small businesses under-price. They should raise their prices. Pricing too low has several negative consequences:

– You drive away your preferred customers. Sometimes larger companies expect to pay a certain level, and if you charge less, their judgment is that you’re not qualified to provide what they want.

– You attract undesirable clients and customers. Those you attract are smaller jobs, clients that are on tighter budgets, the nickel & dimers, those who are shopping for low price over high quality.

– You are not very profitable. This makes your business vulnerable. You’re not building up enough reserves to weather hard times. You can’t afford to pay yourself well, to upgrade your marketing presentation, to pay your people as well as they should be paid.

You can’t afford the strategic thinking and marketing you need to boost your company to the next level.

You can’t afford to hire top-level people, so that more of the work falls on your shoulders when they aren’t up to it.

– You are leaving money on the table. Ask yourself, “If this client hires somebody else besides my company, how much will they have to pay?” If you answer, “They’ll probably pay more to a larger vendor, and the quality might be lower,” then it’s time to raise your prices.

How is pricing a marketing issue?

Pricing is part of your message to your prospective customers. If you set prices too high—or too low—it sends the wrong message, and they won’t do business with you.

Prices are set according to several criteria:

1) Profitability. Making sure all costs are covered with enough left over to give the desired profit margin.

2) Competition. Prices are constrained by your competition.

3) Image. Do your prices fit your image? Will they attract your preferred customers?

Why do you price too low?

Timidity. You’re afraid if you raise your prices, you’ll drive away your customers. You may indeed drive away your marginal customers, giving you more time to focus on your better, more profitable ones.

You don’t know what all your costs are, so you systematically underprice. Costs that are often neglected when setting prices:

Marketing and selling. The cost of getting your customers

Owner’s time, both sold and unsold

Owner’s profit, i.e.. return on your investment of time and money

Cost of glitches, mistakes, slippage, theft

Recouping the cost of developing the products or services

You price based on hours spent or cost of goods sold, rather than on the value you provide to your customers. (See our post “Sell Value, Not Time.”)

What if you can’t raise prices?

If you feel this way, it’s time to ask yourself, are you in a viable business, or not?

Perhaps this pertains to just one part of your business. What do you sell that can or cannot bear a price increase?

Redesign your product or service so that you can sell it for the prevailing market price and retain your target margin.

If you can’t raise prices, control your costs.

  • Cost of labor. Set a maximum labor ratio (sales revenue divided by cost of labor including labor overhead). Watch that number like a hawk. Many small businesses have real trouble tracking this number, because they can’t get their employees (and themselves!) to keep track of how much time they spend on different tasks.
  • Inventory control. Make sure you aren’t holding too much expensive merchandise. Get rid of stale merchandise. Improve your controls of theft, waste, and returns

Focus on profit, not just revenue

When you’re setting your prices, focus on your bottom line—your profit percentage—not just the amount of sales. Know what your profit margin needs to be, then set prices (and control costs) to give you that.

This is a tough lesson for many marketing whizzes. Only the ones with thriving businesses.

January 30, 2013

Presentations for the Non-Presenter

I invited Elaine Love to do this guest  post for my blog.

41% of 5000 people in a 2011 management association survey listed their #1 fear as public speaking.  In the same survey, 19% listed their #1 fear as death.  Even though more people fear public speaking than death, I guarantee, the experience will not be fatal.

You have been asked to deliver the opening remarks for your professional association’s annual meeting.  It was easy when you were sitting around a table with the five people in your management team.  Standing on stage speaking to three hundred people is totally different.  You know your subject, but you have never thought of yourself as a public speaker.


Facts First

How long have you been asked to speak?  Once you know the time parameters, you can organize your thoughts.  If you have ten minutes, break it down into an opening, body and conclusion.

Opening:  On a ten minute presentation, one minute for an opening is ideal.

Body:  The body of the presentation is seven minutes.

Conclusion:  Wrap up your remarks in two minutes.

Granted, this is a simplification.  I can hear your brains saying, “Easy for you to do.”  You will amaze yourself how well you will do.  1 + 7 + 2 = 10 minutes and you are off the stage.



Open with something interesting.  Your audience decides in the first seven seconds if they like you and in the first thirty seconds if they want to hear what you have to say.  Make your first seconds count.

Boring speakers open with the unpleasant pleasantries of “It’s nice to be here” “Thank you for coming” “Glad to see you.”  Don’t waste your precious opening seconds.  Boring openings send the audience scurrying to check their smartphone for messages.

Open with a shocking statistic, a quotation, something humorous or a quick story.  The opening is designed to create attention and interest. When you open with something interesting, you create the impression that the meeting will not be a waste of their time.

Just as a beautiful woman catches the eye, captivates the attention and inspires the interest to want to know more, so does your opening.


The main part of your message includes the information you want to convey.  The easiest way to think about the body is by answering the question, “What do you want them to think, feel or do?”

If seven minutes feels like a long time, consider that the average cell phone call is three minutes and 15 seconds.  Conference phone calls run slightly longer.  Mentally think of yourself as making one video conference phone call.

The easiest way to organize the main portion of your message is to state your central point and back it with statistics, a story or by highlighting a benefit to them.

Tie your message in to the purpose of the meeting.  Make a point and support it.  The more they know the value they receive by following your idea, the more buy-in you will receive.

Seven minutes gives you enough time to thoroughly cover one point.  The temptation is to hint at several topics and not really cover any of them.  If you attempt to cover too many topics in a short period of time the audience becomes confused or overwhelmed.  As you know so well, the confused or overwhelmed mind does nothing.


Summarize your main points and leave them with your “walk away message.”  In a sales presentation you give a call to action.  Here your call to action is what you want them to think, feel or do after you speak.

Bring your remarks full circle by summarizing your main point, your call to action and tying in your opening.

Just like that beautiful woman leaves you wanting more, you are leaving your audience wanting to hear more from you.

In a Nutshell

Have confidence in yourself.  You are probably the only person who knows that you are nervous.  Public speaking will not be fatal.

Give an interesting opening, one well supported point, and a conclusion with a “walk away message.”

Elaine Love writes for, Small Business Examiner and  Her expertise is in small business, marketing, mindset for business and speaking coaching.  Her credentials include Masters Degrees in Communication, 35 years of entrepreneurial awards including “International Innovator of the Year,” World Class Speaking Coach, and author of 3 books.  Contact Elaine on Google+ at +Elaine. 

A Presentations Skills Quiz, Effective Openings and Panic to Power presentation guides are an email away.  Send Elaine your contact information and one speaking challenge you are facing.  You will receive the guide and

November 6, 2012

How to Name Your New Company

Asked on MosaicHub by Jackie G.

Here are 10 rules for naming your new company.

Don’t rush it. A bad company name is tougher to dump than a bad spouse!

Brainstorm to start with. Bring in a few savvy allies and start tossing out both sensible and crazy ideas. Write ‘em all down. The most outrageous suggestion might later spark the most practical name. Listen to yourself as you explain to people what you do, or when they then paraphrase what you do.

After you narrow down the candidate names, run them by people who might be your clients. If you get blank stares, scratch that one. If their eyes show recognition, you’re getting close. Listen for the one that clicks. I bought my company, and retained the (so-so) name, The Business Group. But my slogan, which is my top selling tool, just popped out of my mouth when I was explaining to someone what I do. (It’s “Grow Your Business without Driving Yourself Crazy®.”)

Try to find a name for which the URL is available. If not exactly, then very close. I failed at this, because my company name is too generic. But I got the “dot biz” version. (Your URL must be something you don’t have to spell for people. No hyphens, underscores, abbreviations, or cutesy made up words.)

Can your company name actually tell what you do and convey a benefit to the desired customer? If you can come up with one that does, use it. Even pay for it if you have to

Select a name in conjunction with clarifying your brand and designing your logo. Also choose your tagline or slogan this way.

What about clever made-up names? If people don’t get it instantly, it’s no good. The companies that successfully use made-up words for their name have a million dollar promo budget to drum it into the public consciousness. You don’t have that. For every Google and Xerox, there are dozens of failed names that just evoke a “Huh?” response from people

If you need to launch and don’t yet have a name that clicks, operate under your own name. Then when the right name pops out, register that as a DBA.

If you decide to use your own name, use your last name, not first. “Jackie’s Resume Service” sounds small; “Turner Executive Job Placement” sounds corporate.

If you use your name, is this a problem when you want to sell? Not necessarily. A client of mine just sold her company for $1 million, even though it had her last name. The buyer plans to retain the name.

There’s a trade-off between being too specific and too generic. You could be “The Turner Group,” which says nothing but allows you to diversify. “Turner Executive Placement” is specific, conveys a benefit, but could get in the way if you diversify.

But the less generic and more specific, the more likely you can register the corresponding URL. E.g., “” may well be available.

November 5, 2012

How to Generate Referral Business

Asked on LinkedIn by Shaun Caldwell

Referrals and introductions from clients are still our #1 source of new clients. Introductions from referral sources are much more likely to become clients than, say, cold calls. Here’s the approach we use. Just a few steps:

1. Provide excellent service to your clients so they will talk you up.

2. Ask them for referrals. Tell them who you want: “I want someone as good as you are, who has . . . . (list the desired qualities).” And ask for an introduction, not just a name and number, so that the prospect will expect your call.

3. Follow up! Don’t drop out these referrals and introductions. Sounds obvious, but this happens so often.

4. Let your client know the outcome. What happened with the person they introduced you to? New client? Not interested? Could never reach them? Doesn’t matter–just tell them.

5. Thank them. Doesn’t have to be monetary. I have tried both the reward and no-reward approaches. Most of my clients do not care about getting a money reward. But some do, and I give them a discount off their next month’s services with me. All of them get my profuse thanks!

6. GIVE referrals. The best reward for an excellent referral is giving one back. I notice that when people offer me money for a referral, I’m not interested. But I will drum up business for them if they give me good referrals in return!

So take the lead in giving referrals to those you’d like to get referrals from.

On the other hand, I have taken people off my list who are always asking for referrals but never give any back.

7. After a suitable time, ask for another referral.

8. All referral sources are not the same. Keep track of what quality referrals you get from different sources, and take particularly good care of your take referral sources. I’m talking dinner for two at the best local restaurant.

If someone makes a so-so referral to you, pass them along to a more appropriate person. Then thank your source and tell them what kind of referrals you can really help the most. You can convert a so-so source into an excellent source in this way.

Other kinds of referrals. What else do you want referrals to? I’m always looking for informal speaking gigs, so I ask people what small business organizations they know of that bring in speakers. All the above rules apply.

Marketing funnel for developing referral sources who aren’t already clients is shown in the diagram. Look for professionals who offer complementary services, are not competitors, and who work with the kind of people you want as clients. In my case, this includes CPAs and bookkeepers, IT consultants, web designers. Also people who work for small business support organizations.

Get testimonials. By the way, when asking for a referral, also ask for a testimonial statement, and be ready to record it right then when it is given. The first words out of their mouth will be the best. If you say, “Let me get some paper and write that down. Now, can you say that again?” They won’t be able to recreate it. Testimonials and referrals go together, since the person referred will first check your blog, website, and LinkedIn profile.


October 23, 2012

Has Small Business Marketing Changed Completely?

Filed under: Marketing — Tags: , , — Mike Van Horn @ 11:23 am

For growing small businesses, is marketing today completely different? Many say yes. It’s all about social media.

But this is not the whole story. Despite all the effort I put into social media, I still get 80% of my business the “old fashioned” ways:

— referrals from existing clientsmarketing priorities

— former clients coming back

— public speaking

— networking at small business venues

— my website

People I meet via LinkedIn and other forums, from ezines, via selling ebooks on Amazon, etc. account for the other 20%. So getting my face out there is still #1 by a long shot.

An example: Last Friday at a birthday party for a friend, I got to talking with a woman whom I learned works for chain of schools for massage therapists. When she heard what I do, she said, “We should bring you in to teach our soon-to-be-graduates how to run their practice as a ‘real business.'” Now I could get more business from this one dinner conversation than from all the social media I’ve ever done.

Also, there are the eternal verities of marketing that are just as true with online marketing. Things like:

— Your branding has to be consistent and appealing

— You have to know what your targets want, what message will appeal to them, where they hang out, and how to reach them there. You must know who is NOT your target, so you don’t waste time on them.

— You must take people through the stages of marketing, not try to ram your product down their throat, build relationships, address their concerns.

— You’ve got to ask for the sale!

— You must give excellent customer service.

etc., etc.

These rules are just as true for Facebook and Twitter as for people walking in through the front door of your brick and mortar.

This doesn’t mean you can ignore social media and web presence. Even people you meet face-to-face immediately check you out on the internet. But you must view your online presence, including social media, as an integrated part of your broader marketing strategy. More on what this looks like next post.








July 10, 2012

Selling Internet Video Marketing Services

Filed under: Marketing — Tags: , , — Mike Van Horn @ 4:58 pm

Q. As the owner of an internet video marketing company, what is the most effective way for me to prospect and generate sales with little or no budget? Asked on LinkedIn by Jonathan Franco.

A. Selling “internet video marketing services” cries out for internet video marketing!
At the same time, 80% of selling is just showing up. You’ve got to get your face out there. In the end, people buy you.

The people I know in your business go to meetings of business organizations and make presentations on how to do video marketing affordably. The venue must have wi-fi and a digital projector, so that you can demonstrate some before-and-after efforts. Select a guinea pig and do a two-minute video for them right on the spot. You want people to say, “That’s not so scary! I could do that!” and “I like this guy. I want to hire him to help me.”
Your approach is to show ’em how to do it for themselves, so that they will hire you to do it for ’em.

No budget? Then you have a one-man bootstrap operation–at least initially. You have to substitute your time for money. But you will need to invest in a quality website, where you can embed your videos, because that’s your portfolio.

It’s hard for me to see you attracting investors so you can hire a sales force. Don’t waste your time even trying. Get out there and sell yourself!

April 10, 2012

To Thrive, Banish Doom and Gloom

“I let myself get discouraged by telling and retelling the same old story of woe about how bad things were. This was killing the business. During the plan workshop, I wrote it all out in excruciating detail, took one last look and then tore it up in little pieces. Now the slate is clean for the coming year. From now on, I’m talking about how we’re laying the groundwork for recovery.”

You do the same. And don’t hang with doom and gloomers; stick with the problem solvers.

“The last two years have been humbling. I saw how arrogant I’d been. We assumed that growth would just keep going. But when the phone stopped ringing, we had to relearn Marketing 101. For example, setting targets for number of new clients, and tactics how to bring them in. We should have been doing this all along.”

This is one of the lessons in How to Thrive in Tough Times—Lessons From Small Business Owners–my newest ebook, just posted on Amazon for Kindle, iPad, etc. for $2.99.

When All Else Fails, Try Marketing

Marketing in 2008. *Ring! Ring!* “Hello! Joe’s Plumbing, this is Joe. How may we help you?…Sure! I think we could handle that. What about next Tuesday?…Thank you!” Joe scribbles on calendar. *Ring! Ring!* “Hello, Joe’s Plumbing.”

Marketing starting in 2009. . . . . . Joe sitting at desk twiddling his fingers. “Hum dee dum”…….. The phone is not ringing.

Marketing now. (Joe picks up phone and dials.) “Hi, Pat, this is Joe of Joe’s Plumbing. Haven’t talked with you in awhile. I just wanted to call and tell you how much we appreciate your business. We’re having a special! For the next 30 days, you can get ….”

Joe was really good at plumbing but he didn’t like marketing. But, at long last, he turned to his partner and said, “Everything else has failed. I guess we’ll have to try some marketing.”

Now, you may think this is an exaggeration, but I can’t tell you how many business owners I work with treat regular outreach to their best customers and prospects as a last option.

How about you?

Make some calls. Pick up the phone. Call some of your best customers and those you’d like to be working with.

Show your face. 80% of selling is just showing up. This is more important than all the rest of the high falutin’ stuff people tell you.

Ask, “Who’s buying?” Too often, we focus on who’s NOT buying.

Ask, “Where do we get the biggest bang for our marketing buck?”

Set a reachable target, and track your progress. Be accountable to someone else, so you don’t let it slip out of your consciousness.

If what you used to do doesn’t work, do something else. What will work best in this business climate to reach those you want to work with, and entice them to do business with you?

Want to see some more of this? How to Thrive in Tough Times—Lessons From Small Business Owners is my newest ebook, just posted on Amazon for Kindle, iPad, etc. for $2.99. Worth every cent!

Older Posts »

Powered by WordPress