Work out the percentages!
The ability to work out percentages in business is vital. One of the most important percentages is that of working out your profit margin. Your profits is the only thing that will keep your business alive.
If you are selling a product you need to know how much it costs to produce it or exactly how much you are paying for it. Then you need to know how many you are likely to sell and how much it will cost to sell it. On top of those figures you need to add your profit margin. For example at item costs $20 to buy in or produce. If you sell 300 a week that would mean you sell $6000 the staff wages may be $2000, the business has other running costs of $1000. That means all your stock would have to sell for $9000 to break even (50% margin). If you sell less than 300 you would begin to lose money if the costs remained the same. The reality would be likely that you would need to aim for 100% markup to allow for the chance of a reasonable return. The item would sell for $40 leaving $10 dollars an item in profit if sales were constant.
This is only a simple illustration but it shows that simply thinking that a margin of say 50% is enough would be a serious error if you did not know all of the costs and how many items you are likely to sell.
Every business needs to know its costs and profit margins for every item or service it sells. Some items will of course have different markups according to what the market can stand and things like how quickly you can trunover cetain products.
Other precentages are worth knowing such as lead to sale ratios. If you need 10 leads to make 1 sale you know that to obtain your 300 sales next week you need 3000 leads. How will you get those leads? That is the challenge but you know how many you need and that gives you the desire and need to find that many.
Take to time to think about your business and see how you can make use of percentages to manage the way that you work and success will result.
Swine Flu and Business
Have you made contingency plans for your business should the swine flu take hold?
It would be good to plan now to see how many tasks could be performed by workers at home instead of coming in to work.
How will staff travel to work if trains and buses could be dangerous to use?
Now is the time to think things through and make plans.
Lead Generation
For many businesses there is a need to continually generate new leads. There are many ways this is done, advertising in the press, TV, Radio, Internet, billboards, mail shots, telephone calls and generating new business from old leads, existing clients and referrals. Leads are the lifeblood of business and when times are good the generation of leads tends to take care of itself. However we are now in a recession and every penny counts. Vast amounts of money that were once thrown at the standard forms of advertising hoping that some of it would work is now a luxury that most businesses can not afford. Some businesses of course have never had that luxury.
It now takes time and careful planning to see where you should be spending most of your advertising budget and how effective it is. Start with past clients or those leads that have not yet converted. Set aside time each day to phone and see how those clients are doing. What are their current needs? How can your business meet those needs in the current economic climate?
Businesses today that are offering great value (not necessarily the lowest prices), good service and go that extra mile will win business in these tougher times. Allocate a slot each day when you and your team will make those calls. If you are going to spend money on advertising use every trick in the book to make it effective. Get some expert advice and save wasting money. It is possible to get some free advertising if you know how!
Don’t forget per per click and here is some free software to help you use Google to the full. All you need is Firefox a free web browser (it’s better and safer than IE Explorer for all your needs) and you will really be able to use Google Adwords cost effectively.
Building Credibility
For a business to do well it needs to build credibilty with its customers. This is something that once you have a customer is relatively easy to do. By offering good service and value, fulfilling your promises and so forth will be credibility.
However what can you do to build credibility with people who have not yet used your services?
This has to be done by the impression that you give about your business from the first point of contact. How the is the phone is answered? Is it answered quickly and with a friendly voice? Are emails replied to promptly and brochures posted quickly? Your business must be run in a friendly and efficient manner. The website should look great and give client the information they need along with brochures and other material, making sure it is of the highest quality.
Every contact with a customer must reflect what your business will do for that customer when they commit to an order. Once that order is placed then you can continue to build on your reputation and keep that customer for life!
Bacon or Sizzle?
The title of this post may sound strange.
However there is an important sales principle behind this.
When you sell a product what are actually doing? Are you selling a product or what the product will do?
The saying “it’s the sizzle that sells the bacon” is very true.
Imagine the difference between a packet of wrapped bacon on the supermarket shelf when compared to walking past a cafe with its door open and the sounds and smell of frying bacon (vegetarians please imagine harder!) What is most appealing? In essence the product is the same but now your senses tell you what it is for and how good it is even before you taste it.
When you are selling a product or service work on the sizzle. What can this product or service do for your customer? Give them a taste let them see the sizzle. Create a ‘wow’ factor. Then when they do they will really want to buy from you.
Referrals – Bringing Life to Your Business
One of the best sources of business has to be when you get referrals from your customers. Now often we wait until a customer recommends our service to someone and such recommendations are greatly appreciated. However that is leaving things to chance. Is there a way of increasing those recommendations?
The answer is ‘yes’.
You can ask your customers for referrals! How? Well simply put you could say, “so John which one of your work colleagues has been showing an interest in getting xxx..” You may well find that John has been talking about his future purchase and others too said they would like one. There is your referral.
For customers on your mailing list you could ask them to write down the names and address of 2 or 3 people that they feel would like to know about your product or service. You can then follow those people up with a letter saying that ‘John has said you would be interested in xxx and you are pleased to tell them that you can help’.
There are many ways you can get referrals so don’t delay and don’t leave it to chance. Build into your sales pitch and follow ups a referral system. Remember too that referrals are more likely to buy from you than people that respond to an advertisement.
A Successful Copywriting Formula
Good copywriting is vital for you to succeed with your sales letters, advertisements, web pages, news releases etc.
Here is a formula that will help you develop your material into something that will really work.
We will use the AIDA principle.
A: Attention
You need to capture your customers attention. Don’t write about how good you are. Write about something that will solve your customers problem or fulfill a need.
I: Interest
Once you have their attention it would be a shame to lose it! Keep their interest by adding relevant material that follows your opening lines. Show how you will solve that problem of fulfill that need.
D: Desire
Create or arouse in your customer Desire. Give them a powerful reason to buy your product or service.
Action:
Make sure you tell your customer what they have to do now. How do they order?
By using AIDA it will help you focus on your customer not you or your business. Customers are not really interested that your business has been operating for 30 years. They want a product or service. How will you supply it? How long you have been established and other such points can be tucked under logos and so forth but there is no need to promote that overtly.
If a person is looking for a plumber because they have a burst pipe they want to see things like: Call us anytime 24 hours a day – 7 days a week. We guarantee to be with you in 2 hours! Emergency telephone helpline! These are things that will solve their problem.
Sit down and write with specific problems and solutions in mind and target customers accordingly. Remember AIDA and you will find your copywriting will be greatly improved.
Too young or too old?
When someone wants to start a business they will hear many reasons why they should not do so.
It’s a bad time to start in a recession!
You don’t have the expertise!
You are too young!
You are too old!
and so on and so on—–
Let’s think about the last two points. Too young or too old.
Age is no barrier to someone making a success in business. Many of today’s leading entrepreneurs started when they were just kids. Sir Richard Branson (Virgin) and Cameron Johnson readily come to mind. Others have started very successful businesses in what can be described as ‘retirement’.
Never let any one put you off your goals because of age! If you plan to succeed you will do so.
