business

Why is Sales Such a Bad Word?

Everyone is trying to sell something, whether we realize it or not. Even employees are trying to sell themselves to get a job and keep moving up the ladder. Although selling has a bad reputation, it is more about intent, which makes it either good or bad.

The Bad Side of Sales

Selling a service or product that is unnecessary, unhelpful, damaging, or just not needed are the worst forms of selling. The “not needed “ product can be very subjective though, because no one really needs a Dodge Challenger Hellcat, but on the other hand, maybe it is exactly what is needed! On a serious note, a common example of selling something that is unnecessary can be a professional telling you that you need to replace your entire heating system, when it can easily be fully repaired for a fraction of the cost. Another example can be a warranty that is completely useless. The list goes on and every business that sells or provides a service should try to avoid selling in this manner.

The Good Side of Sales

If you are selling something that is in the best interest of your client, customer, or patient, then you are selling correctly. Put their interests before your wallet and you have nothing to worry about. This is the simplest test to alleviate your fears of being a sales person.

Don’t Over Think It

Don’t think about it too much. Everyone is selling something to some degree, whether we recognize it or not.

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How to Destroy Your Business Success in 6 Steps

Sometimes to be successful means to avoid doing the things that will destroy your success. It’s easy to go down the wrong path and it’s important to be aware of this.

Step #1: Saddling Your Business with Debt

Conventional wisdom states that there is smart debt vs. dumb debt or a similar description of two kinds of debt. Although there is some truth to this, the bottom line is that large amounts of debt will cause a huge handicap to your business, especially a start-up. Even if you are doing well it will not feel like it when you have massive debt payments each month or sometimes on a daily or weekly basis if you took out a predatory lender loan. When you have easy access to large amounts of debt it numbs your sense of being financially cautious, prudence, and allows you to spend your money on things that can easily be justified but are not necessary.

Step #2: Poor People Management

See what happens if you constantly treat your employees, vendors, and customers disrespectfully. The end result will be high turnover, sabotage, lack of a sense of shared purpose, losing customers, and everything else negative. It is amazing to see how little attention is paid to the management of people in a poor performing business.

Step #3: Over Working Yourself

There are times when you need to work more or work more rigorously, but if done for too long, then your productivity will decline, decision making becomes worse, and you may find yourself in the hospital for stress induced health reasons.

Step #4: Not Listening to the Right Advisors

Unemployed Uncle Jimmy with a string of failed businesses will not provide you with the advice you need, and if he does provide you with advice, then do the opposite. Or, which is also very commonplace, is to seek the advice of the wrong professional. Make sure the professional that you confide in is an expert with the advice you are looking for.

Step #5: Personal Issues

This is somewhat related to step #2, but more on a personal level. If you are going through difficult times on a personal level, then this will ultimately translate into poor business performance.  A common example is taking care of a sick family member that needs you. If you need to focus more fully on your family situation, then delay starting a business, or for an existing business try to delegate more of your business responsibilities to trusted employees.

Step #6: Ignore Marketing and Sales

Many years ago, I met with a brand new business owner to discuss his business and try to help him out. During our discussion, I asked what he was doing for marketing, and he said that he did very little because he didn’t want to spend money on marketing because marketing costs money. I’m not sure of my exact reply, but he was no longer in business within a few months’ time.

Summing it Up

Some of these steps may seem obvious, but they are common due to the fact that it is hard to take a step back, access a situation, swallow your pride, and say to yourself, “Hey, I need some help because I am not always right.” We should probably all say that more often.

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The Differences Between How Men and Women Manage a Business

There are differences between how men and women manage their business, their employees, and their finances. What are these differences and does it matter?

Do you really think that I am brave enough (or foolish enough) to write an article with a topic like this?!

Maybe for another day.

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Which Type of Business is the Best One to Own?

Which type of business is the best one to own? The short answer is one that makes money, but the long answer is that it should have all or some of the following characteristics:

Simple product or service: The more complex the product or service you are offering, the harder it is to operate your business. For example, it is much more difficult to train someone to be a management consultant than a server at a restaurant, although some restaurateurs might think otherwise.

Recurring and/or predictable revenue: Subscription-based services receive recurring payments on a monthly, quarterly, or annual basis, which tend to be highly predictable. A project-based business performs a service, gets paid, and has to find another customer, whereas, a subscription-based business may have no known end date or automatic renewals. A perfect example is a software company, but another example is a landscaper. A landscaper may not be thought of as a subscription-based business, but it actually is.

Cash in before cash out: Selling a product or service and then waiting to get paid can drain your cash resources, especially if you are growing. Ideally, you want to operate a business that receives cash up front and then pays expenses.

Low capital investment: If you need to invest large amounts of cash upfront for improvements and equipment then it creates a hurdle to overcome. This is especially true if you do not have a lot of cash and are using debt because the debt payments act as a handicap to your success. On the other hand, if you just need to rent a small office to start your therapy practice, then the risk is much lower.

Economic profits: Did you know that many small businesses do not produce much of an economic profit? For example, if you start your own medical practice and then make as much as you did as an employee then there is no economic profit. Although, you do have to give it a few years to determine this.

Easily scalable: This means that you can easily duplicate your success by either opening more locations or growing your operations easily without relying on the owner exclusively. A perfect example is a franchise, which has a blueprint to run the business smoothly. A bad example is a niche-consultant who works one on one with clients.

The interesting fact to note is that almost any business can modify its strategy to have the desirable traits above. The complex can simplify their offerings, services or products can be made recurring, and profits can be grown to more desirable levels.

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Are You Thankful for What You Accomplished?

Happy Thanksgiving! We should always be thankful for everything in our lives, including people, things, and accomplishments. Sometimes we take our accomplishments for granted, and it is good to examine the past to see just how far you have come. Here are some examples:

New home: Whether you just purchased your first home or moved into a more accommodating new home, this is quite an accomplishment.

Paid down debts: Did you significantly reduce your debts or pay them off? For some, if your debt levels have stabilized, this too is an accomplishment.

Started a business: Taking the leap to start a new business is exhilarating and quite an accomplishment.

Expanded your business: Did you open another location, hire additional employees, or increase your sales a sizable amount compared to the prior year? These activities all take time and energy and are a huge accomplishment.

Charitable giving: Has your charitable giving increased compared to the year before? If so, then excellent, but if it hasn’t, maybe it has increased as a percentage of your income if your income went down.

Increased your savings: Even saving just 1% more of your income than you did the prior year will have an enormous impact on your finances if you continue to do this each year.

Worked less: Are you working just a few less hours than you used to? A few less hours each week can make a big difference in your life.

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5 Habits for a Healthy Business and 3 Unhealthy Habits to Avoid

Our habits are repeated actions that we take, and have a tremendous impact on our results. Healthy habits become ingrained within us and we continue to do them with little thought or resistance over time. What are some practical, easy habits to ensure a healthy business and also the habits to avoid?

Healthy Habits:

Schedule activities: If you want important things to get done, especially non-urgent, important items, then you need to schedule them. Whether you need to schedule an activity on a daily, weekly, or monthly basis, once it is on your calendar, then the likelihood of it being completed increases significantly. Examples include setting aside time for marketing, networking, reviewing finances, and reviewing processes.

Delegate often: Do you want to get more done? The key is to delegate, but not only to delegate, but to delegate the right things and delegate to the right people. Think before performing a task that needs to be done, especially a somewhat urgent task. This can be as simple as scheduling appointments, cleaning up a mess, or communicating simple issues.

Pause before spending: Virtually every single expense can be justified and rationalized for your business or for you personally. Before committing to spending money, first pause, think about it, and answer  the following questions: can the expense be delayed without their being a negative impact, are their other options, and what would happen if I do not incur this expense?

Consult advisors regularly: Everyone should have an advisor to consult with before making major decisions. High impact decisions can include: employee management issues, loans and finances, purchasing another business, opening another location, legal matters, etc.

Measure results: This can include reviewing your financial results, effectiveness of marketing campaigns, and employee productivity. Do not make assumptions, but keep track of important metrics and review your finances. Just because you are busy does not mean that you are profitable. Look at the numbers!

Unhealthy Habits:

Impulsive decision making: Almost all important business decisions can be pondered, and do not have to be made immediately. Take your time!

Following emotions and feelings: Don’t do things just be you feel like it or because you don’t feel like it. This can include being reactive to a customer that is upset or an employee that made a mistake. Although you may feel better at the moment, it doesn’t help long-term. The same goes for how you feel. I know that I feel like playing Cooking Fever on my phone for a few hours, but if do so, then only the virtual customers in the game will be fed, while my family will be starving.

Consulting with inept people: I know this may sound harsh, but seek the advice of people who are competent to give you advice and/or thoroughly know you and your situation.

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Don’t Focus on the Wrong Things

What we focus on gets our time, energy, and attention, but how do we know what to focus on to amplify our financial results?

Reactive items: Sometimes there will be an event that needs to be dealt with immediately, but most of the time this is not the case. If you find that you are always being reactive then you are probably not focusing on actions that will produce the best results. Also, this means that you not operating your business in an organized manner, which tends to produce more reactive items.

Minor items that produce little to no value: An example is spending gobs of time and money trying to design and print your business cards. Your business card should be a representation of your business, but if you spend 15 hours trying to design them, then that is overkill. Cleaning excessively and making everything impeccably neat is another waste of time. Cleanliness and neatness are good, but don’t spend an hour each day cleaning your desk, car, or anything else. If you do, then you may have other issues that I am not qualified to fix!

Blaming others: Everyone likes to be right, right? But if you don’t know who is helping you and who is hurting you then how can you run your business profitably? Know who is your enemy and who is your friend. The people surrounding you include your employees, vendors, professionals, subcontractors, etc. They are usually working toward the greater good, but if you do not think so, then take an objective look at the situation, which is probably more positive then your emotions will lead you to believe, to determine if this is the case.

Tasks that can easily be delegated so you can make more money: There is a business owner that I often see cutting the grass, edging, and taking care of the landscaping of his business. It is understandable to do this for your home if you really enjoy this type of work and have the time to do so, but not for your business. Let’s calculate the lost income from this endeavor. Let’s say the landscaper cost an average of $50 a week plus some extras and snow plowing for a total of $3,500 per year total. Then, it takes you an average of 2 hours or more each week to do all the landscaping (don’t forget that you need to have all of the equipment, maintain the equipment, change your clothes before yardwork, shower, change your clothes after, and now you probably need a nap). This can easily equate to spending 5% or more of your time on landscaping work. What if that time was spent trying to grow and develop your business and was equivalent to $10k, $50k, $100k or more of income?

How we spend our time has the largest impact on the profitability of our business. All of the above also relate to letting your emotions rule your decision making versus being well though-out, which I have written about previously. Focus on the right things!

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The One True Business Formula for Success

There are dozens of formulas and ratios that a business can use to determine success and profitability. However, there really is one that is most important and should be used repeatedly . . .

Sales – Expenses = Profit

Keep on repeating this formula over and over again and you will do just fine.

 

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What Keeps Business Owners Up at Night?

Aside from worrying about everything, there are really just a few timeless concerns of most business owners. If you don’t have at least one of these concerns then that is probably a concern. Here they are with a few solutions:

Employees: No matter how well you run your business, it will always be a challenge to manage employees. Common problems are: finding good employees, keeping good employees, and making sure that they are productive. There are several ways to address these concerns that are simple, but no way full-proof. The first step is to take your time hiring and to hire the right people from the beginning. Next, treat your employees well and fair. Lastly, spend the time to train your employees properly so they are productive. It sounds so simple, but maybe that is why it is so difficult.

Taxes: Who wants to overpay their taxes? Not only paying taxes, but staying compliant with all of the numerous tax filings can be a huge burden. Having a good accountant can help to alleviate this concern.

Growing: If you are not growing then your expenses will soon eat up a good portion of your profits. Growing sales is a major concern, however, the focus should be to grow your sales profitably. Aside from smart marketing, each new dollar of sales should be profitable to you, otherwise something is wrong.

Cash flow: Either not knowing where your cash is going or not having enough are both problems. Your accountant should help to explain where your cash is going and why there is a shortage. Common solutions are to improve your accounting systems and procedures, increase sales, implement better collection processes, increase your profit margins, and obtain a line of credit.

Too many hours: I don’t think that you are allowed to stop thinking about your business so technically you work 24 hours a day. How can you work less hours? There are dozens of ways, but a few easy to implement solutions are: better scheduling, delegation, and a commitment to work smarter, not harder.

There are a few other closely-related concerns, such as health insurance for employees, feeling burnt out, and the economy. Unfortunately, we cannot control the economy.

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Follow Your Emotions and Go Broke

According to dictionary.com, one definition of emotion is “an affective state of consciousness in which joy, sorrow, fear, hate, or the like, is experienced, as distinguished from cognitive and volitional states of consciousness.” Emotions can be complex and if you make business and financial decisions based solely on how you feel at the moment without considering facts then this can be a disaster. Here are a few examples and ways to prevent you from making decisions based upon emotions:

Investment decisions: When the stock market tanks and the economy is in a recession, you may be strongly tempted to sell all of your investments, which is most likely the worst decision ever. If you have a good financial advisor then hopefully they can temper your emotions.

Too excited over expected results: A perfect example is when a sales person tells you how much money you will make by placing an ad in their publication because thousands of people will see your ad. It may be true that thousands of people will see your ad, but if they aren’t your target market then your results will be dismal.

Conflicts with customers and employees: If you have a performance issue with an employee, first determine if this is a recurring problem before you pounce on them. Maybe the issue just needs a gentle correction versus more severe actions. What about a customer complaint? Even if you are right, try not to reactive emotionally so as not to let the situation escalate out of control.

There are several techniques that you can use to prevent poor, emotionally-based decisions:

Wait: Don’t be reactive to another person or situation. If the situation requires you to speak or deal with it immediately, then pause, even if just for a moment, before speaking. For other decisions, take a day or more to make a decision. The time spent making a decision should coincide with its importance.

Look at the facts: What you think is true based upon how you feel and what actually is the truth are two different things. Separate feelings from facts.

Seek advice: Speak to a trusted professional, friend, or colleague about your decision. Sometimes just speaking to a third party before making a decision can put things into perspective.

Don’t let your emotions get in the way of your decision making.

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