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Q&A: Small Business Consultant Answers Critical Questions
Small business owners have plenty of questions, and not every small business can afford to hire a rock star consultant to help them identify opportunities and roadblocks.
Rick Wakeland, a Senior Business Consultant for Corporate Business Solutions, is sharing some free advise you’ll want to tap into. Listen up as Wakeland answers the most common questions he hears from small business owners.
Based on the economic downturn over the past two years, what immediate action can the owners of small and medium-size businesses take to increase their likelihood of being successful?
Small and medium-size businesses should make a plan based on the new reality of their business. This plan should include at least a three-year budget that will meet their profit expectations. The business overhead expenses and cost-of-goods sold will have to be adjusted to meet the plan. And it should be reviewed at least monthly against actual performance to ensure the business is on track.
What is the best way to increase my revenue in the very short term?
The best method for increasing sales in the short term is refocusing on your current customer base with special offers directed at the products or services they had purchased from you previously. And, business owners should make these offers so attractive that word of mouth will expand the message. Using social networking (such as Facebook and Twitter) and a marketing tool, such as Constant Contact, will support the effort as well.
How do I develop a budget and what are the advantages of developing one?
If you are using accounting programs such as QuickBooks or Peachtree to manage your business, you can download your yearly sales and expenses by month into a spreadsheet (such as Excel). Add a column titled "budget" and one titled "actual." Using this template, it is a simple process to develop the budget for the year, a month at a time. Then you can compare the actual to your budgeted amount and make any necessary adjustments. This will help you quickly identify cost overruns!
Everyone tells me that there is a difference between profit and cash flow. What is the difference and why is that important to me?
Profit is the amount that is left over after all costs are covered, including material, labor, overhead expenses, and taxes—otherwise known as net profit. Cash flow is the amount of money available to pay company commitments on an ongoing basis. Just because a company is profitable doesn't mean it has enough cash to meet its day-to-day operating needs. A business cannot be successful unless it is both profitable and manages for its cash flow needs. Also, profits are often set aside to invest in expansion or long-term investments.
How can I make sure that the price I am charging for my product is the right price? And, how do I know if it's too high or too low?
The prices you charge must be based on your costs, including your labor costs, your materials costs, your overhead costs and a planned profit for you! You cannot set your prices based upon what a competitor charges because his costs will be entirely different than yours. Knowing your costs and controlling your costs is the key to being competitive in any economic environment.
Small Businesses Face Unlikely Threat: SEO
Indeed, small business owners have long tried to level the playing field by using SEO to rank higher on Google and attract new online visitors. But one SEO specialist is warning that some of the SEO tips and tricks small business owners learn may lead them to an organic Internet marketing disaster.
Whether you do it yourself or hire an SEO consultant, there are dangers in the realm of SEO that could get you on Google’s bad boy list. And once you are on, it’s hard to get off.
“Last week I was sitting with a friend whose retail-business had collapsed because his Web site had disappeared from the front page of a major search engine, when I realized how vulnerable small business sites were,” says Kishore Dharmarajan, principal of instantSEOsystem. “Like many small business owners, he had fallen prey to a smooth-talking SEO expert who promised him quick ranking on all search engines.”
As Kishore tells it, the unethical SEO consultant that his retailing friend hired did initially catapult his site to the top of Google, Yahoo and Bing. As soon as the site reached the front page of all three search engines, the retailer was flooded with new orders. He didn’t think he needed to spend money on any other marketing channels—so he shut it off.
“Many small business owners have no clue about SEO, and don’t realize that artificial ranking can be achieved through black hat techniques like blog commenting, bookmarking, video blasting and backlink farming,” says Kishore. “But search engines have smartened up and sniff out such sites quickly. By the time the small business owner realizes his site has been de-indexed or pushed out by the search engines, he would have invested a lot in his SEO effort or come to rely on online channels for sales. Both can be fatal for a small business.”
Kishore says the only way to retain consistent top ranking is to offer relevant information and true value to customers. If you know what your customers want and can cater to their needs, he says, your site is automatically qualified to be on the front page.
So, yes, SEO can outperform other Internet marketing strategies—when it is done right. You can drive strong results fairly quickly. But if you do it the wrong way, it could be costly.
This Single Marketing Tip Will Give Your Small Business the Advantage
Here it is: Make sure your marketing doesn’t sound like everybody else’s.
Sounds simple, doesn’t it? It is simple to understand, but it’s more difficult to execute—and it’s not my idea, either. I got it from Terri Langhans, a marketing consultant who used to be the CEO of a $35 million national advertising and marketing agency she built from the ground up.
“Building your marketing plan and messaging around that one word, “want,” can set a your business apart and attract more prospects simply because everyone else out there is being boastful, blatant or boring,” explains Langhans.
“Whether you’re an architect or a freelance graphic artist, a health care consultant or a personal trainer, whether you’re selling assisted living or air conditioning, we all sound alike when it comes to talking about our business. It’s easy to go on about yourself, your credentials, process, technique and specialties, which is boring. Or, on the other end of spectrum, it’s easy to slide into boastful and blatantly hard-sell messages when you explain why you’re so great at the voodoo you do.”
As Langhans sees it, people don’t care about you and your boring business. They care about themselves and what they get from the service or expertise you provide. That’s why she suggests small businesses focus on creating simple marketing strategies and marketing tools. Her strategy is based on the who, what, when, where, why and how communication model—packed with “want” words, phrases and benefits.
“You’ve got to connect to what people really care about and what they want before you try so hard to convince. For instance, no one really wants a marketing plan, marketing strategies or even a marketing consultant,” Langhans explains.
“They may need it all, but what they truly want are marketing ideas and tools that will help them get more leads, attract more prospects, win more clients and generate more referrals. They want to decide the right mix of marketing activities for their specific market and competitive environment. They want to talk about their business so that clients will listen, buy and refer them to others.”
Langhans advice: Go beyond the labels and jargon, or else your message will just be ‘blah blah blah.’ If you’d like to know more ways to generate “want” words, and string them together in marketing and sales conversations, download her free teleseminar, Help Them Hire You: How to Talk About Your Business So That People Listen, Buy and Recommend You to Others.
Bizy Debuts B2B Deal Site for Small Biz
Taking a page from the Groupon crazy, a company called Bizy just launched a business-to-business deal site in the U.S. As its first-ever deal, Bizydeals.com is offering Ford's Transit Connect, a popular small business cargo van. Bizy is seeding two 2011 XLT Transit Connects as part of the launch.
"Two enterprising and quick-acting small business owners are going to get a Transit Connect for $11,700 a piece, a 50 percent discount off the list price of $23,400," says Bizy co-founder Gary Slack. Slack's b2b marketing agency, Slack and Company, helped launch eBay Business, eBay's small-business portal, several years ago.
Slack says Bizy is using its marketing dollars to subsidize several head-turning early deals instead of investing heavily in more traditional advertising channels. The 2011 XLT Transit Connect deal will run for two full weeks. That compares to the daily deals from sites like Groupon. Slack figures busy small business owners need more time to think about product purchases than general consumers.
Bizy’s model is simple: It helps sellers of products and services for small business owners connect with their target audience. Groupon has worked to do this on a local basis, but Bizy will take it to a new level by empowering small businesses to tap into savings on equipment and supplies they need to run their businesses.
Upcoming and future seller-sponsored bizy deals will include 50 percent discount offers for small-business-oriented products and services from a variety of sectors, including trade show display services, online payroll management, janitorial services and products, office furniture and products, hotel room stays, virtual assistant support, interior design services and much more.
So what are you waiting for? Consider listing your small business services and tapping into the potential savings on Bizlydeals.com--and let us know how it works.
Should Your Small Business Play the Credit Card Transfer Scheme?
All week, I’ve seen stories about credit card balance transfer schemes, reducing credit card interest rates, and credit cards as an alternative to bank loans. Capital One announced card balance transfers with a 1 percent cash back reward. MBNA announced zero percent balance transfers. In a word, the next wave of credit card company battles for small business customers is on.
Perhaps one of the most helpful articles I saw on the credit card balance transfer scheme was in The Economic Times. The Times reports, “The key appeal lies in the lower interest rate charged by the institution offering the scheme. Suppose, you are paying an interest of 2.95% per month on your existing credit card's balance outstanding. If you decide to transfer this amount to another bank under a scheme that doesn't levy any interest for, say, three months, your savings could be huge if you manage to clear the dues within this period.”
But there are pitfalls to credit card balance transfer schemes. You need to read the fine print before you sign on the dotted line. The low-interest transfer may expire after 90 days and leave you with an even greater interest rate than you were paying to your previous credit card company. Sure, you could work the system by continuing to move your debt from one card to another, chipping away at bigger chunks of the balance due by taking advantage of the lower or no interest. But one little slip up could cost you. It’s a lot of work to work the system.
The ultimate goal is to use credit cards for the rewards they offer—whether that’s cash back on purchases or dinner gift certificates—and then pay them off at the end of the month. Dave Ramsey has excellent advice for using credit cards: don’t use them. “If you ‘have to’ use plastic, I suggest a debit card,” Ramsey says. “I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.”
Check out this Ramsey radio clip on credit cards:
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