Business Saves $1,177 Annually In 5 Minutes!

One important area of improving your profit margins is to reduce your costs. Sometimes you can reduce your costs without a reduction in the quality of service you receive from a supplier, sometimes you’ll see lower quality – cheaper isn’t always better. However…

I saved a client $1,177 in 5 minutes. Without mentioning the name of the client, I can say the business is located in Perth. For illustration purposes, let’s call my client – Mary.

Area saved #1 : Mary sent me an email saying that she was still paying $77 per month on her Sensis bill for a CitySearch web site.

CitySearch was one of the many online directories that popped up during the dotcom boom in 1997-2000. It was bought out by Sensis. Back in the 1997-2000 period many businesses were called with an offer of a new website for only $77 per month.

What many businesses didn’t realise is that this monthly fee went on forever. Sensis never contacted Mary to say “Hey we’re billing you $924 per annum for a web site we built 10 years ago, we can now update your website for free if you like.”

Mary’s website was replaced over a year ago (not by CitySearch), so I knew that the $77 per month was a totally unnecessary expense. I got Mary to cancel the CitySearch service. I only wish Mary brought it to my attention sooner. She could have saved over $1,000 in the past year.

STRATEGY FOR YOU : Check all your supplier’s invoices and question any unnecessary services.

Area saved #2 : Do you have a website? If you do you’ll be paying an annual fee for domain name renewal. Did you know however that I use Netregistry (an Australian company) – their annual fee for renewal is $44.95. If you’re paying any more than that you are paying too much.

STRATEGY FOR YOU : Check the bill from your domain name supplier.

Area saved #3 : Unnecessary domain name registration. Mary had a website ending with .net.au. DotnetDotau domains are really not needed. If you want to secure another domain for your business, register the Dotcom name as well as your DotcomDotau address.

STRATEGY FOR YOU : Don’t register or renew a DotnetDotau domain (.net.au). Save the money instead.

Mary’s savings per annum : $984 for CitySearch, $140 for (.net.au) and $113 for using Netregistry to renew her DotcomDotau address. Total saving $1,177.

(Actually it took less time for me to save my client $1,177 than to write this email. But I thought you’d appreciate this information.)

The lesson : Charges from suppliers for unnecessary or excessive fees is commmon. It’s worthwhile to periodically check all your invoices and question any charges you don’t know about or feel are overpriced. This is an easy way to improve your profit margins.

Buy Hummer, Get Free Shotgun – Real ‘Way-out’ Marketing!

Source : The Age, 16 March 2010

An American Hummer dealership is sending the Hummer off with a bang, giving away a free shotgun with every new car.

An American Hummer dealership will give away a Browning Citori White Lightning shotgun, worth $2,000, with every new Hummer they sell. Lynch Hummer in Chesterfield, Missouri is one of the highest selling Hummer dealerships in America, and last year they decided to add guns to their showroom.

With the recent ‘wind-down’ announcement from GM (the makers of Hummer) the dealership’s owner, Jim Lynch, says that he wants his Hummers to go out with a bang. “There is now real reason to believe that the current inventory on hand at dealers may be the last of the new Hummers, we wanted to send them off with something memorable,” he says. “Browning and Hummer are prestigious brands and American Icons – bringing them together is a natural fit. “The guns have been a huge hit with our Hummer customers and now we are taking the ‘Guns and Hummers’ concept one step further,” says Lynch.

What’s this got to do with marketing?

Everything – Not only has Lynch Hummer value adding to their Hummer ‘package’ – they’ve chosen a controversial ‘product’. Being controversial means Lynch Hummer has received tens of thousands of dollars in FREE publicity. Heck, the article got my attention and I’m as far away from Missouri, USA as you can be (Perth, Western Australia). Well done Lynch Hummer – great marketing!

What’s Basketball Got To Do With Marketing?

A quote from Michael Jordan : "I have missed more than 9,000 shots in my career. I have lost almost 300 games. On 26 occasions I have been entrusted to take the game winning shot, and I missed. I have failed over and over and over again in my life. And that is precisely why I succeed." What a great attitude and what a great man! Isn’t fascinating that every great person has this type of winning attitude and ‘mindset’. After all, in sports and in business – no game or venture (or even every marketing campaign) succeeds every time.

Even successful business leaders like Steve Jobs, Bill Gates and Donald Trump have failed with certain ventures (read their biographies to find out what they were). But, these successful business people know that one or two ‘home-runs’ can outweigh ten or more failures and make them very rich.

If something doesn’t work, try and try again. If all possible, seek mentors or experts to achieve goals faster. Our expertise here at Kinetic is ‘Great Business Marketing‘. Whether it’s business-to-business marketing (B2B) or business-to-consumer (B2C) we aim to bring in quality leads (enquiries) into a business at the lowest cost possible.

When it comes to business attitude, we found that the wealthiest business owners have a strong ‘marketing mindset’. They understand that they need to ‘invest’ in order to achieve a ROI. For example, a business owner spends $1,000 on advertising, and brings in sales of $5,000 with a profit of $2,000.

Question is – How often would you run that advertisement? I hope you answered – "As often as possible."

27 Vital Questions You Should Ask Before Buying A Business

I met the husband and wife owners of a small retail shop recently. The business was running at a $65,000 (approx) annual loss. They had purchased the business over 12 months ago and had been steadily losing money. I looked briefly at their books and realised they had paid too much for the business. On top of that, both of them had no retail business experience and they had decided to cut out all of the advertising that the previous business owner had been running – due to cost reasons only.

I asked them how much research and due diligence had they conducted before buying the business. I was shocked by their response…

"We asked the solicitor who was performing the business settlement service if the business was a good buy."

Talk about throwing $$$ away. Needless to say, they no longer have any available capital to invest in marketing or anything else. The outcome will be to close up shop and accept the loss, and the lesson.

So how do you actually avoid this type of business disaster?

Ask yourself these questions…

1. What do I want from being in business?

• For lifestyle (to work fewer than 40 hours per week, with the freedom to go on holidays whenever you choose)?
• To make a profit by building the business up (increasing sales)?
• To generate more cash-flow than a 9-to-5 job?

If your reasons are not listed above – don’t buy the business. If you want to be involved in what the business does (manufacturing, retail, services, etc) out of personal interest, it’s much less stressful and safer to be an employee.

2. Why am I buying this particular business?

• It’s in a prime location.
• It has a massive customer database which is not being used to its full potential.
• You’ve created a specific plan to massively grow the sales revenue using knowledge you’ve accumulated from being an manager in a similar business, or from a previous business(es) owned.
• The business has ‘something’ (Intellectual property, branding, contracts, etc) that you cannot easily duplicate or purchase.
• You can buy the business at a price much lower than the market value. The vendor is highly motivated to sell.

3. What will be my exit strategy to get out of the business?

• Sell the business for a profit
• Sell the business to a major shareholder(s) and become a silent partner
• Pass the business down to a family member
• Franchise

4. What skills do I have that will make me successful in this business?

Please don’t think that all that is required to ‘improve’ the business is cosmetic – by changing some of the products, re-designing the store interior, etc. These ‘improvements’ won’t double sales.

Only very good marketing, a good sales team and good systems will increase sales significantly. Think MARKETING, SALES and DELIVERY of the product or service (using systems).

5. What skills will I have to "hire in"?

6. What cash flow do I need?

What’s my break-even cash-flow (to cover expenses, wages, etc)?

7. How much working capital do I have access to?

8. Will this business suit me i.e. hours, type of operation?

To ask the vendor who is selling the business…

9. How long has the business been operating?

10. How long have they had the business?

11. Why are they selling?

• Worn out from working long hours for little money?
• Couldn’t make the business work (perhaps in its current location)?
• Actual legitimate reasons such as retiring, moving to another state or country, or looking for another challenge in another business?

12. What is the Cash flow and Profit (Gross and Net) for the business?

13. What is the business owner paying him/herself?

14. What do the last 3 years of financial accounts show?

15. How has the business been valued?

Using the ROI method – based on ‘current’ profit of the business? Certainly not priced on what effort & money the current owner put into the business over the years. Only profit counts.

16. Who are the key customers, suppliers, staff?

17. What are the terms and length of any leases?

18. Will the current owner stay on and assist for a period of time?

Ask them to put this period in WRITING!

19. What areas of the business are systemised?

20. Is there a business plan?

21. How many hours a week does the current owner work in the business?

22. When was the last time the current owner took a holiday?

23. What are the marketing systems like? Do they make money for the business?

Review all advertising material, the customer database, the POS systems (if applicable), any loyalty programs, special promotional material, etc.

24. What facts support the "story" of the business?

25. How secure is future income i.e. contracts with customers and suppliers?

26. How dependent is the business on the current owner?

27. What will it take to grow the business so I can sell it for a profit?

Before you make an offer!

1. Get your accountant to check the financial accounts

Obtain actual lodged tax returns with the government, not the business owner’s printout or handwritten bookkeeping summary.

Your accountant will ensure that the business has cashflow and is not over-capitalised.

2. Hire a solicitor who is experienced in buying businesses like the one you are looking at.

Your solicitor will ensure that the contracts with suppliers, the landlord, etc don’t have any surprises.

3. If you are spending over $250,000 on the business, or even if you want to be extra careful, pay for a business valuation.

Pay a licenced valuer to come in and audit the business. Even if you have to spend $7,000 for the valuation, it’s still much better than paying $50,000, $100,000 or more than you should have to buy the business.

You may even be able to ‘use’ the valuation to negotiate a better price.

The lesson

Homework always pays off in business. Taking shortcuts and buying a business on emotion often lead to regrets. Don’t let this happen to you.

Goal Setting and Planning for Business Entrepreneurs

Goal setting

Why do so many people struggle to achieve goals? There are many reasons, but one of the most important is lack of constant re-enforcement and reminding that a goal exists. The way to achieve re-enforcement is to simply write the goal down. Specific written goals take a life of their own and have a much greater ability of becoming a reality.

Here’s how you set goals :

1) Look at your written down vision and life purpose. What smaller goals would help you to eventually reach your ultimate life ambition? What skills will you need?

• Raising capital
• Asking for donations
• Public speaking
• Book writing

2) Think about what ‘smaller’ goals you would like to achieve in your life too.

For example, becoming a famous musician might not be your vision or life purpose, but you would like to learn how to play the guitar.

Use S.M.A.R.T. goals

Specific

Measurable

Achievable

Realistic

Time – frame

The S.M.A.R.T. acronym above is a tool to assist you to be more specific in your goal setting. For example; don’t just write down that you want to be rich. Here is a more definite statement :

I will own three residential houses with a combined worth of 1.4 Million dollars by Jan 2012.

See the difference? The goal is detailed, not only ‘real estate’ is mentioned, but a specific type of real-estate – ‘residential’. Also the goal value can be measured (by a real-estate valuer), is achievable, realistic and has a specific time of completion.

Here are two templates you can use to help you set your goals :

• Life planning and goals – Achievements (for you last year)
• Life planning and goals – New goals (for you this year)

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