Posts Tagged ‘business tips’


Mondays with Mike: Fast Flow Prospecting

Stocksy_txpaa3f874fBY3000_Small_164426The business world moves too fast for any of us to rest on our laurels.  While Monday might be great, smart entrepreneurs worry about Tuesday, knowing that ensuring a steady stream of new clients is essential for a healthy business.  It’s a struggle we all face – finding high quality prospects to convert and keep our companies growing. 

Client referrals have always been a traditional source for new prospects, but there are some problems with getting good quality referrals.  If we assume that you’re providing outstanding service to your existing customers, they’ll have two primary concerns about sharing your services with their competitors.  First, they’ll want you to continue to be available to serve their needs.  They don’t want your success to get in the way of their demands.  Second, if you’re providing a service that gives them a competitive edge – whether it’s personal or professional – they’ll be reluctant to share their brilliant discovery – you – with their competition.  They may want to keep you all to themselves.

The gold ring is the organic referral – when a friend of your client is desperate for a plumber, asks for a recommendation, and the client shares your name.  An associate asks who designed your client’s logo, and they give you a rave review and pass on your contact info.  The problem is that these high quality referrals are few and far between, and they’re also – by their vary nature – inconsistent.

So what do you do?  You require new clients, but cold-calling is expensive and yields poor-quality results.

The answer is fast flow prospecting, and here’s how it works:  You approach your clients and ask them for a referral to their other vendors.  They may look at you like you’re crazy.  The angle, though, is that you’re going to reach out to their other vendors and work with them to provide even better service for your mutual clients.  Whether you can consolidate shipments to save your clients money, or whether you can bundle services and offer predictable monthly payments, working with other vendors can help you create efficiencies and provide better service at a reduced cost for the client who referred you.

Here’s the key, though – once you’ve established a relationship with your vendor partners, then you ask for referrals to their other clients.  You’ll be presented with a pool of new clients – clients to whom you’ll be recommended by your partners, and clients for whom you can provide outstanding, streamlined and efficient service.  You’re expanding your network via new partnerships.

So let’s say that you’re a small, independent internet access provider.  You get some vendor referrals from your satisfied clients and you connect with a company that installs and monitors security systems.  The two of you offer bundled services to your existing shared clients, providing them with better, more affordable internet services that improve the reliability of the security system.  Win-win.

The security company shares its client list with you, and you can now pitch your combined services to a whole new group of prospective customers – customers who can get reliable references from the provider of their security services.

Working together with your clients and their other vendors gives you a much wider field of clients, and provides ample opportunity to improve efficiency and profitability for everyone.

 


How to Get In Bed with Your Banker

Stocksy_txpf799c772Ea3000_Small_104560Most small businesses still need banks. They provide valuable financial services daily for companies. Banks can still be a major source of capital for the promising business. How do you make sure that they are there when you need them? Get your business in bed with your banker! While this many not conjure up a pleasant image, it must be part of the strategy. Getting the banker to know your company’s capital requirements must be established far in advance of when you may need them. Here is what to do and why it works:

Establish yourself as a customer. Open checking and money market accounts at the bank. Use their merchant, ACH and wire services. Pay fees to use their services. Why it works: Bank employees are trained to help customers and you want to part of that group as soon as possible.

Go into the bank weekly. Be seen at the bank and get to know the branch manager and key staff. Visit at least a few times a month. Talk to them about the bank, their family and your business. Why it works: People do business with other people they know, like, and trust.

Participate in common community events. Go to the events that the banks sponsors locally. Show support for their causes. Get on joint committees. Why it works: You can demonstrate what it is like to work with you and share a common goal.

Share the progress of your company. Sit down with loan officers before capital is needed. Show them your sales and profit projections. Impress them with your knowledge of the financial statements. Revisit them when you make progress toward your goals. Why it works: Numbers are power. They are easy to take to a loan committee. Bankers trust business people that understand them.

Get a small loan. This may be a home equity loan (or similar secured asset) to be used by your company. Pay the loan back on time and then try to increase it. Why it works: This builds a reputable track record the bank can reference.

Keep your personal credit score high (as well and Dunn and Bradstreet number). Bankers like numbers that increase. Why it works: A high credit score will show that you can be trusted to borrow money. They believe that past performance predicts the future.

Bring more customers to the bank. Everyone loves referrals. Be responsible in helping the bank grow their business. Why it works: If you help them, they are more likely to help you.

Go for the big ask: It’s time to apply for the bigger loan for your company. This can be a term note or line of credit. Why it works: Because the bank now trusts you and your company.

How have you got a banker in bed with you to get a loan?


Nextiva Tuesday Tip: Should You Hire Your Spouse to Work in Your Business?

Stocksy_txpb6090cd68s3000_Small_17056If you have trouble finding workers with the dedication and loyalty you need, there’s a solution that can offer the best of both worlds: hiring your spouse. You get an employee who you know truly cares about your business, and the money you pay your spouse stays “all in the family.”

But before you broach the idea to your spouse, there are some important factors to consider.

How will working together affect your relationship? Some spouses can work together all day long and enjoy a happy marriage after hours, while others find business stresses spilling over into their personal lives. Clearly define roles within the business so each of you knows what he or she is responsible for. Also set boundaries outside the business, such as not discussing business over dinner or taking regular weekends off.

What does your spouse expect from the job? Perhaps your spouse expects to work closely together and spend lots of time with you, while you expect to scarcely see each other because you’ll both be so busy handling your separate duties. Clarify your expectations from the beginning and make sure you are both on the same page. Is this a short-term arrangement or a permanent move? Will your spouse need to work for free if money is tight?

How will a spouse working in the business affect your company’s dynamic? When you bring a family member into the business, nonfamily employees may assume your spouse will get favored treatment, that they will be passed over for promotions or that they can’t be honest with you about problems with your spouse. Discuss these issues openly to ease their worries.

What are the legal and tax implications? The way that you report and pay taxes for a spouse in the business will vary depending on whether your spouse is considered an employee or partner/co-owner. If the spouse is an employee, you need to withhold appropriate taxes from his or her pay just as with any employee. If your spouse has an equal say in the business and/or contributes capital, he or she is considered a partner, which affects your business’s tax reporting and payments. (See this IRS article for more information.) To avoid unpleasant surprises, consult your attorney and accountant regarding the tax and legal implications of bringing a spouse on board. 


Mondays with Mike: The Quick Qualifier – The Secret To Better, Faster Hiring

For entrepreneurs with a sizeable staff, payroll can be one of the biggest expenses.  That expense can multiply quickly if we don’t hire the right people, so any techniques we can find to improve our hiring outcomes can make a huge difference in our bottom lines.  The fact is that there aren’t a whole lot of shortcuts when it comes to running your business better, but I’m going to share one that can help you simultaneously speed up your hiring process while sifting out your best choices – automatically.

????????????????????????????????Conventional wisdom may tell you that casting as wide a net as possible in your hiring search will yield the highest quality result, but given today’s job market, your problem is unlikely to be a shortage of applications.  Rather, you’re likely to be buried under a sea of resumes, and your greatest challenge will be separating the wheat from the chaff – reducing the flood to a manageable stack of resumes from qualified, competent folks.  That’s where my technique comes into play.

When I post an ad for a job, about 75% of the way through the ad, I insert the following:  “To prove that you’re a meticulous reader, you have to include the following sentence when you send your resume: ‘It is with my utmost respect that I hereto surrender my curriculum vitae for your consideration.’”

Now here’s where the automation comes in.  You create an email filter that searches for the specified sentence, and sorts all of the qualifying resumes into a folder for you to review.  Think it won’t make a big difference?  Think again!  I’ve had as many as 80% of the resumes for a specific position eliminated by this filtering tactic.  Now you may be worried that you might discard a great resume, but let me tell you why this technique works:

  1. The unemployment rate is still so high that folks are desperate, sending off resumes to any ad they read, regardless of whether or not they’re qualified.  In fact, the applicants who don’t include the sentence may not have even read the application, and might have zero relevant experience.  They’re not the employees you’re looking for.
  2. Regardless of the field, attention to detail is crucial, and including the sentence demonstrates that an applicant cares enough to get it right.
  3. You’re looking for candidates who can follow instructions, and applicants who comply with your directions demonstrate a willingness to do what you expect them to.  They’re eager to please, and that’s important for nearly every position in a business.

I’ve used this technique repeatedly, and it’s proven to help select the very best candidates for my careful consideration.  In fact, one of the best employees I’ve ever hired responded by writing: “Yes, I’m so detail-oriented I am including the sentence you requested. However, I also noticed you spelled the word ‘meticulous’ incorrectly, and here’s the correct way to spell it.”  She ended up being a partner in one of my companies.


Work Your Biz Wednesday: 5 Things I’ve Learned

Happy 15th Anniversary to the Small Biz Lady, Melinda Emerson! Check out her list of the top 5 things she has learned over the years, and follow her on Twitter at @SmallBizLady.

From March 5-25, Melinda is giving away a prize every business day to help support your small business venture! Apply to the "15 Days of Giveaways" contest today at www.succeedasyourownboss.com!

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Nextiva Tuesday Tip: Is Your Business Senior-Friendly?

Stocksy_txp2258803bJk3000_Small_80398You may think your small business is doing a great job of providing amazing customer service. But if your customer experience isn’t in line with what senior shoppers want and need, you could be leaving money on the table. And since the latest Global Aging Report from Nielsen projects that by 2050, nearly one in five people will be 60 or older, that could be a lot of cash!

Seniors often have more money to spend and more time to spend it than younger consumers. Here are some things seniors care about that you should consider when creating a senior-friendly customer experience:

  • Print size. Half the seniors surveyed struggle to read package labels. Make sure your in-store signage, menus or marketing materials are legible for older readers. In general, a minimum of 12-point type is best. Avoid reverse-out type (light type on a black background), as this is harder to read.
  • Good lighting. Is lighting in your store, office or restaurant adequate for older shoppers? If they can’t read your menu without getting a headache or worry about tripping and falling in a dimly lighted store, they may avoid your business altogether. 
  • Noise. As we age, background noise can drown out normal conversation. Make sure your location is conversation-friendly by using window coverings, carpet and décor to cover hard surfaces and muffle noise. Keep background music to a level that doesn’t make hearing difficult or offer to seat older customers away from speakers.
  • Physical comfort. Wide aisles, handicapped-accessible restrooms and seating that can accommodate walkers or wheelchairs make a difference in whether older customers visit your location. About one-fourth of older customers in Nielsen’s survey complain that retailers don’t have enough places to sit down and rest, handicapped parking, handicapped bathrooms or wheelchair-accessible ramps.
  • Personal assistance. Older customers may need help with heavy packages or bags. They are also more likely to want personal advice before making a purchase, rather than using a smartphone to go online to look up product information as younger customers tend to do. Be sure your employees are sensitive to older shoppers’ needs.
  • Senior-friendly websites. Older customers do go online, but typically on their desktop computers. Make sure your site is senior-friendly by keeping it simple and readable. Use plenty of white space, easy-to-read fonts and colors, and clear navigation. You can even provide options for enlarging type in case users don’t know how to do that in their browsers. Finally, provide various options for seniors to contact your customer service department—they may prefer to speak to someone on the phone rather than use chat or email. 

Mondays with Mike: The Sure-Fire Plan For Killing Your Business

2014-02-27_1405I’m sure you’re wondering if I’ve lost my mind.  Why on earth would you want to read an article telling you exactly how to kill the business that you’ve worked so hard to build, nurture, and grow?  The answer is that it’s useful to take a step back from all the hard work we do to make sure we’re not inadvertently doing things that damage our companies.  Here’s a look at what not to do:

  1. Turn your hobby into a business.  Just because your friends tell you that your spicy barbecue sauce is the best they’ve ever tasted, that doesn’t mean you have to find a way to profit from it.  There’s a difference between a hobby – something you do to relax and release energy – and a passion – something you do to create energy.  While successful businesses thrive on passion, they can also destroy the pleasure that we take in our hobbies.  Not everything you enjoy needs a business plan.
  2. Get rich quick.  You may be thinking, “Isn’t that the point?”  The fact of the matter is that the best way to get rich is by investing your time and energy in your passion and organically growing your business, rather than chasing what you think is the next trend in an attempt to cash in and get out.  Isolate your passion and nurture it, rather than trying to work in a field just because you think it’s the next big thing.
  3. If things are going south, work harder.  By the time most businesses fail, the entrepreneurs who started them are absolutely exhausted.  Instead of trying to add hours to the day or taking time away from family and friends, spend you time finding ways to work more efficiently.  If you can automate aspects of your business, you’ll be working smarter, rather than harder, leaving you time to enjoy the fruits of your labor. 
  4. Nurture the weak.  I’m constantly amazed by how many companies cater to the least lucrative (and most difficult) clients, at the expense of building business with the big customers – you know, the ones who keep the lights on.  Rather than trying to squeeze an extra few bucks from the reluctant spenders, commit to cultivating your heavy hitters and providing them with excellent service.  You can’t please everyone.  Why not please the ones who are the most valuable?
  5. Measure revenue from the top line.  Yes, it’s essential to bring money into your business, but that’s only part of the equation.  You could land a million dollar contract tomorrow, but if your expenses eat up $990,000 of it, your bottom line is only $10K.  Focus on what’s left after you’ve paid your staff, covered your other expenses, and paid yourself.  That’s what you’re really earning.
  6. Focus on your wallet.  When you realize that every single business decision you’re making is based on money, it’s time to take a step back.  Successful businesses make money, but they do it by working with passion and ensuring that their customers are satisfied.  Steve Jobs didn’t build innovative products just to make money (though he certainly did profit.)  He wanted to introduce elegant, functional solutions for everyday problems.  Remember why you started your business and work to leave a positive impression on your community.

There will never be a shortage of businesses in trouble, and savvy entrepreneurs will learn from the mistakes of others.  Make sure you’re not sabotaging your own success.   


Why to Question Assumptions When You Are Successful

It’s easy for small business owners to question themselves and their assumptions when they are failing. But at that point, it may be too late to fundamentally make changes that can turn their company around. The success rates goes up if the owner questions assumptions when things are going well. However, most entrepreneurs will have a hard time doing this because they will not want to “mess with success” or “if it’s not broken, don’t try to fix it”. Many times, they do not even know what the success formula really is. They make cause-and-effect connections where it truly does not exist.

Stocksy_txp5226ac4eb53000_Small_135613For example, the phenomenon of success actually not bringing more success has been statistically documented in basketball. A  study called “The Hot Hand in Basketball: On the Misperception of Random Sequences” states, “ The chances of success on the next shot are not correlated with the success of the last shot. In other words, the ‘hot hand’ idea is a fallacy.”

To increase success in the future, look to see what conditions exist in the market that will make the company profitable now. Evaluate past results, but do not base future actions solely on them. Don’t say, “Well, it worked in the past, so it should work in the future!” Keep thinking like a start-up entrepreneur as long as possible. This worked for IBM in the early ‘80s when the company moved the work on their new personal computer to a separate business unit so the effort would not be “weighed down” by IBM’s past success in unrelated areas.

A $75M company I know had been in business for 50 years. Historically, they were only able to deliver five percent net profit to the bottom line. Sales had grown slowly over the years, so there was never a need to make any changes since they could predict what they could contribute to the parent company. A new CEO got worried about what would happened to the company’s profits if sales dipped during a recession.  She realized that even a small drop in sales was going to mean disaster for their overall profit contribution. The CEO needed to find ways to cut their expenses or increase their gross profit while not cutting revenue. She was able to do this by throwing out established distribution channel assumptions, cutting discounts for many vendors and raising prices for newer products to their customers. When sales eventually shrank during the Great Recession, the company was able to deliver the same dollar profit to the parent corporation. Now that times are better, and sales have grown again, they have become even more profitable.

What assumptions are you not questioning?


Why Your Business Is Asking All The Wrong Questions

Stocksy_txp6e171103c53000_Small_17064Many entrepreneurs start a business because they have an overwhelming passion around a certain interest. They want to help people accomplish a stated goal. A problem develops in growing their business because they continually ask the wrong question:

“I wonder if my exciting idea can help other people?”

This question is entrepreneur-centric and does not revolve around what the customer wants. Just because a person is passionate about an idea and its solution does not mean that people will pay for it. This is the biggest mistake entrepreneurs make when they try to convert a hobby to a business. They have a dream that they want to earn a living doing what they love. This is a result of a misinterpretation about the feel-good directive that an entrepreneur needs to be passionate about their work. While this is true, a better view is that an entrepreneur needs to be passionate about what the customer wants them to do. Therefore, the better question to ask is:

“I wonder if the customer has the money to solve a pain which I am excited about?”

This question focuses on what the customer wants, not what the entrepreneur needs. The customer cares only about solving their problem, not the passion of the entrepreneur. The answer to this question is the core of what any business needs to focus on. Customers always buy painkillers before they buy vitamins.

Other wrong questions to ask:

  1. Would this product help your company? Again, most prospect will say yes as not to confront or embarrass anyone. Unfortunately, this may not reflect the action they would truly take. Instead ask: What would it be worth to your company if I could fill this need (resolve this pain)? With this question, the entrepreneur establishes what the customer wants and the monetary value of solving their need.
  2. Are you interested in buying the product? Most prospects will simply say yes because they want to be agreeable and not seem negative. What prospects say and what they do are two different things. Instead ask: Where can I send your order? This is an assumptive close and pushes the action to now. It will also immediately raise any hidden objections.
  3. When should I contact you again? Most prospects will give a date in the future and then never respond again. Instead ask: Should I contact you in the future? If so, what will different then as opposed to now? This gives the prospect an ability to say no so time is not wasted in the future. This also self qualifies them for another call and gives insight into what is holding their purchase back now.

What questions are you asking? Are you really listening to the answers?




 
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