Are Peers On Your Team Too?

In business much can be learnt from peers in your own industry or from related industries.

I found an ‘old’ photo – well, a November 2008 photo of Ari Galper (left), Steve Baker (right) and myself (middle) after we had attended a two-day marketing seminar.

Ari Galper is the creator of Unlock The Game™, a completely different mindset about selling. I actually invested in Ari’s program ‘Unlock The Game™’ back in 2005. The program based on using sincerity to build trust in a sales environment. Highly recommended.

Then there is Steve Baker former business coach to the carpet cleaning industry and now famous for his expertise with fax and voice broadcasts.

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 our office 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 more customers means more sales and more profit!

Are You a Marketer or a Shop-Keeper?

Everyone who is successful in business has a mentor (or mentors) and a coach – or should have! Even Bill Gates (once the world’s richest man) had Warren Buffett (the world’s second richest man) as his mentor. One of my mentors is Dan Kennedy. I receive his paid newsletter once a month and it’s a great way to improve my business and marketing knowledge. One of the topics in the newsletter was ‘Are You a Marketer or a Shop-Keeper?‘ As I have recently been talking to a number of small retailers I found this topic to be particularly relevant.

Out of 14 retailers who I spoke to in December, only 4 (28%) understood the importance of constant promotion in a retail store. I was dumbfounded! The other 72% held the belief that doing the same things they were doing (very little) was somehow going to lead to sales increasing in their stores.

I heard that Albert Einstein quoted this definition of insanity … "Doing the same thing over and over again and expecting different results."

These retailers were silently praying for a few more people to come into the store, that staff won’t call in sick, suppliers won’t increase their prices, no competitors will open a shop nearby, and that the landlord won’t up the rent this year. Dan Kennedy calls this approach ‘passive marketing’ – which actually is doing nothing at all. He said "This person is a shop-keeper and an order taker, sticking up a sign, putting goods on a table, sitting and waiting."

The only way forward is being a marketer – constantly promoting to attract new customers, get them to spend more, and return more often. That’s how businesses really improve cash-flow and increase their value.

Getting More Customers – Fast! (part 1)

Often business owners contact me because they need more customers – and more cashflow – today!

So how do we achieve this goal for our clients? The answer : We start with our Kinetic Media & Marketing ‘INSTANT CASHFLOW’ checklist!

One item on the checklist is the break-down of sales process into two components : The enquiry (lead, store browser) and the conversion of that lead into a paying customer. Often most businesses get enough enquiries, but it’s their sales and follow-up processes that are lacking. It’s easy to work out which area is the problem – we ask the business owner (and staff) to record how many enquires turned into sales. This becomes a percentage – sales conversion.

Funnily enough most business owners think their conversion is around 70-80%, but when we measure it, it’s often only around 10-40%.

It’s common for us to review the sales and follow-up systems for a business and make changes to improve sales conversion. I’ll give you an example :

A building material manufacturing company we worked with had a conversion from inbound calls to sales of only 18%. By reviewing ‘what’ they said to potential customers on the phone and then improving their telephone script, the sales conversion increased to 27%. The increase in percentage doesn’t sound like much but when you apply it to a half million dollar ($500,000) turn-over business – it equates to a massive $251,000 increase in sales.

Would you say it was worth it for this business to hire our consulting services? Hmmm, dumb question.

Summary

Improving sales conversion by examining inbound phone calls is one good marketing strategy to get more customers fast. In part two I’ll reveal another – watch this space…

27 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 flushing $$$ down the toilet. 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. Why am I going into this 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 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 stress and safer to be an employee.

2. What do I want from being in business?

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, DELIVERY of the product or service (using systems).

5. What skills will I have to “hire in”?

6. What cash flow do I need?

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 has the current owner had the business?

11. Why is the current owner selling?

• Worn out from working long hours for little money?
• Couldn’t make the business work (perhaps in it’s 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?

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 is 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-capalised.

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.

25 Things You Absolutely Must Do To go From Nothing To Self-Made Millionaire Within The Next 7 Years …

I came across this interesting article by Bob Bly. I have added my comments in italics.

THE 25 PRINCIPLES OF BUSINESS SUCCESS BY BOB BLY:

1. Have a definition of success.
2. Live below your means – with occasional exceptions.

A good book to read about this is the Richest Man In Babylon

3. Learn a money-making skill that will pay you at least twice the national average income.

My suggestions would be : Sales, marketing, designing, copywriting, computer programming, speaking, writing

4. Improve your level of skill or the demand for your skill until you are paid twice as much — $200,000 a year.
5. Set a financial goal of a liquid net worth of $2 million excluding primary residence by age 50.
6. If you are going to have children, have them young.

Not so sure about this one – I’m 39 and I enjoy spending time with my young son very much.

7. Assign a dollar value to your time and outsource everything you can, except what you are great at, to people who charge less than your hourly rate.
8. Learn how to negotiate win win deals.
9. Be a specialist, not a generalist; focus on core skills, markets, areas – three maximum, no more than that.
10. Micro niche
11. Become an information junkie and be sure to read in “adjacent areas”
12. Modelling

Don’t re-invent the wheel. Another word for modelling is mentor. In almost every business situation – someone has been there, done that – find out who they are and learn from them.

13. The Real McCoy Strategy
14. Don’t lower price; add value
15. Do things that are important but not urgent
16. Little details count
17. Achieve balance between 4 success factors
18. Attitude of gratitude
19. Understand the best and worst investments you can make
20. Do something you love
21. Stop trading hours for dollars
22. Stop making excuses
23. Understand Robert Gibert’s success formula : SWL + SWL = SW
24. Put it in writing
25. ACTION

Lots of great ideas here – how many of them can you work towards this year?

The Real Reasons Why Small Businesses Fail

Do you know a small business that has failed?

According to a Commonwealth Bank Of Australia survey 80% of new small businesses fail in the first five years. Why is this so?

In his book, Small Business Management, Michael Ames gives the top reasons small businesses fail (in no particular order) :

• Lack of business management experience
• Insufficient capital (money)
• Too much debt in relation to cash-flow
• Poor sales
• Poor location
• Poor inventory management
• Over-investment in fixed assets
• Poor credit arrangements
• Personal use of business funds
• Unexpected growth (sounds like a good problem to have, but too much growth can lead to lower quality product or service, more returns, mistakes, hiring of unsuitable staff, overspending on stock, cash-flow problems, etc)

My thoughts on this that out of the list above ‘Poor Sales’ should be the the top of the list, though I have personally seen business fail for the other reasons too. I would re-arrange and group these reasons for business failure as such :

1) Poor sales. Including poor location.

2) Lack of management experience. Including insufficient capital, too much debt, poor inventory management, over investing in fixed assets, poor credit arrangements, personal use of business funds, unexpected growth.

Both of these two main areas of business failure can be addressed by hiring experts and for the business owner to invest in their own continual business and management training.

Mark Fregnan on Business Marketing Analysis

Mark Fregnan on Business Consulting Results