Why stay chained to your desk when you have a powerful computer right in your pocket?
One of the most successful programs we’ve put in place as franchisees is a Marketing Action plan. Simply put, this plan plays to the strengths of the franchisee. I was never one for going door-to-door to find new customers, so I found a few specific actions I could do well to get new people in the door. If we got a business card, we’d turn it into a luggage tag and send it back to the client. We found that 73 percent of these people actually used the luggage tag, and many became customers. I also recommend joining a networking group or a BNI group. Becoming a business leader in your community is an easy way to make lasting connections with influential people. You never know when that can turn into a mutually beneficial relationship. Consider too, looking into something like pay-per-click advertising. This is a great way to reach people you don’t already know who can become new customers. What you do isn’t as important as the fact that you do something consistently and well. To reach existing customers for repeat business, we’ve always strongly believed in sending thank-you notes. If you spend more than $100 in our store, you get a personalized thank-you card. Nearly 85 percent of our business comes from repeat or referred customers. We send out weekly emails to more than 1,400 customers. The messages are product-based, include news from the shop and feature a customer to tell their story and ask for ideas to grow. Most importantly, remember to tell (and show) customers what you can do, not what you can’t. Marketing is not a verb. With a few specific actions you can do well and measure, you can be successful. Big corporations market based on money, but small businesses market with the time, energy and passion of the owner. Every business has something that makes it unique — the thing that it does better, faster or cheaper than the competition. This uniqueness and your guarantee need to be the core of the message that you deliver to your customers. Put yourself in the mindset of your customer. This will allow you to speak to their fears, wants, needs, expectations and delights. Describe your business in the terms that are most familiar to the people who buy from you. This will lead to more business for you.
Break it down however you want, but the truth remains: there are only four ways to grow a business:
- More customers,
- More often,
- More money,
- More margin.
As a business owner, you know that only one of the “Four Mores” pays: more margin. Very little of the formula for business success is complicated. It may not be easy, but it is simple. Consider how to grow your margin: you can raise your prices or lower your costs. The key to success is to work with both sides of this equation. Be aware of your costs and watch for the same or better product at a lower cost. That’s not to say you shouldn’t be loyal to your vendors, but one of the best ways to lower your costs is to consolidate purchasing with fewer vendors. As the volume of business that you do with them grows, they are likely to reward you with better pricing. Take the time to calculate your margins on a regular basis — monthly, for example. You should break out your costs into the same categories that you use to categorize your sales. Total gross margin makes a great indicator for the overall profit health of your business. But when troubleshooting, changes and improvements are necessary, you have to address those at the department level. This means you’ll need to calculate gross margins for each department in your business. On the other hand, the prices that you charge your customer need to be competitive. When gauging the effectiveness of your pricing structure, listen to your customers and shop your competition. While price is commonly one of the first questions your customers will ask, it’s not necessarily the key to customer satisfaction. Your job is to create value for your customers and finding a winning balance between cost and price helps build a strong business foundation.
You have to measure if you want to grow. The results you have now will tell you what’s working, and the results you don’t have will make obvious what is absent. But you’re a small-business owner, and you’re already overwhelmed; measuring can’t be your full-time job. It doesn’t have to be. A system I recommend is called the “Thumbprint.” It’s just three groups of numbers:
- Sales — We usually talk about monthly sales and compare them to last year
- ACT – The amount of an average customer transaction
- TGM – Total Gross Margin
ACT and TGM should both be measured historically over 12 months or as many months as you’ve been in business. There are only two ways to grow sales: either get more customers or convince your existing customers to spend more. To calculate ACT, divide sales by transactions. Both ways to grow sales are accounted for in that one simple number. There are also only two ways to grow margin: raise prices or lower costs. TGM is the money you have after you subtract any costs that are directly related to making a sale, so both sides of that equation are represented in that number as well. This is an accurate way for franchisees across the system to compare how they’re the same, how they’re different, who is having success and who needs a hand. This quick Thumbprint allows two small-business owners from completely different businesses and regions to relate to and learn from each other. In turn, this multiplies opportunities to learn from each other.
Program for businesses in distressed areas plagued by red tape
Completing HUBZone paperwork can be a daunting task for many businesses. However it may pay off in the long run as illustrated by this company in Delaware.
Source: delawareonline, Article written by Jeff Mordock, published July 17, 2015
After losing out on a potentially lucrative federal contract, Frank and Donna Masley took steps to ensure it would never happen again.
The owners of Wilmington-based glove manufacturer Masley Enterprises Inc. qualified to become part of the federal HUBZone program, which assists small businesses in urban and rural communities to get preferential access to government contracts. MORE…
Completing this certification was very beneficial for several businesses and now more need to be encouraged in Delaware to apply. Find your nearest PTAC for no cost assistance with the HUBZone application process at http://www.aptac-us.org/contracting-assistance/
Obama’s Latest Executive Order Requires Sick Leave for Contractors
A new executive order by the President will provide sick leave for some 300,000 workers.
Source: Government Executive, Article written by Charles S. Clark, published September 8, 2015
In another in his stream of executive moves that don’t require congressional approval, President Obama used Labor Day and the ongoing presidential campaign to highlight his signing of an executive order requiring federal contractors to provide up to seven days sick leave for employees.
“We’ve seen that many companies, including small businesses, support these policies, because they understand it’s helpful with recruitment and retention,” Obama told a union crowd in Boston on Monday. Back in January’s State of the Union address, he had stated that, “We are the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home.” MORE….
Several executive orders have been issued by the President. Contact your nearest PTAC with questions about these executive orders.
By Tim Parker
Your business’s accounting is probably the last thing you enjoy spending time on, so why not take a few steps to make it easier? These nine small business accounting tips can help.
It’s an easy area to overlook. As a business owner, you might look at making your website more effective, improving your management skills, company morale, conserving electricity, and getting the best prices on your raw materials but there’s one place that you might not think twice about.
Your accounting department probably isn’t an area you scrutinize. One or two people sit at a desk all day, shuffle paper, type a lot, and at the end of the day, if bill collectors weren’t calling you, you’re happy.
Or maybe your accounting department is you. You might not be an accountant by trade so you’re always looking for a way to make the act of money shuffling more efficient is welcome. We’re here to help.
- Consider Lockbox Processing
If you receive a large amount of customer payments, you’re a prime candidate for lockbox processing. Instead of having payments sent to your business address, they go to a PO box where the bank processes the payments and deposits them directly into your account. The bank sends you electronic records of the transactions that are automatically entered into your accounting software.
If it seems a little complicated, it will be at first but the amount of time saved by not manually processing payments makes the investment of time and money worth the hassle.
- Improve Credit Screening
A sale is only a positive for your business if you actually get paid. A customer who doesn’t pay becomes a bad debt and that costs your business money. If you’re shipping product on credit, do a credit check first. Invest in software that will automatically screen customers and put a hold on shipments if their credit looks questionable.
Ask for a deposit or ship COD to avoid the accounting nightmare of chasing down bad debt. Even if you recover the debt, you probably lost money anyway.
- Rethink how you reimburse employees
The process is often cumbersome. Employees who amass travel and entertainment expenses fill out a form, include a stack of receipts, and submit for reimbursement.
The problem, however, is the errors. Mislabeled codes, addition errors and missing information mean more work for the people processing the payment.
Instead, use an electronic entry system that prepopulates information and allows the employee to scan receipts. All or most of the process becomes automated.
- Use a purchase card
One employee spends $5 and needs reimbursed. Another spends $10 and yet another spends $7. How about the $29 invoice that arrived today? All of these small charges take far too much time for such a small amount of money.
Instead, give key employees and/or departments purchase cards. When they make a purchase, they submit the receipt or invoice and accounts payable matches the receipt to the statement. Instead of multiple checks, they cut only one for the month.
- Use a standard chart of accounts
Instead of allowing people to code invoices as they would like, make everybody use the same account numbers. When processes are consistent across all employees and departments, the accounts people can process paperwork more rapidly.
- Make new employees complete all paper work before starting
Allowing important employee documents trickle in makes it more difficult for HR and accounts payable. Send the employee all paperwork prior to their first day and tell them that it has to be submitted before they start working.
- Collect or apply taxes immediately
Waiting to do something later invites accounting errors. When employees are paid, account for payroll taxes right away. Same with sales taxes. And pay estimated taxes regularly and on time.
- Set up separate coding for ongoing projects
If you’re constructing a building, creating new technology or other project that is ongoing, set up separate line items. This allows you to pay bills as needed but gives the project manager clean, easy to generate reports of how costs compare to the budget. Entering costs of the project into the general ledger at a later date means processing the same invoices twice. There’s no need for that.
- Download bank records daily
If you’re using software like QuickBooks or another higher-end package, downloading transactions from the bank daily is easy and automatic. Not only does this allow you to check for fraudulent activity but it makes generating monthly reports faster. Higher-level managers don’t want to wait until the middle of the month for financial statements from the previous month. Easily solve this problem by doing the work throughout the month while transactions are fresh.
Becoming more efficient often means investing in technology and training. An accounts department running off of manual processes is wasting a lot of time and inviting errors. As an owner, you’re paying them more money to do tasks that could be automated.
Don’t see technology spending as a cost. It’s an investment that will pay you back rapidly.