Posts Tagged business

A lot of companies are going through tough times in today’s global recession and many companies have closed their doors permanently as a result. One of the reasons that they may no longer be in business is because they did not spend enough money!  They cut back on expenses too much. Let me be a little more specific here. They cut back on the wrong expenses.

It is alright to cut back on expenditures like new desks, chairs, memo pads, computers, software, and office supplies, but when it comes to things like marketing to get more customers, or spending money on client projects, you must refuse to cut back. Not having the newest computer more than likely will not put you out of business, but cutting back on the quality used on your product or service could very well create unhappy clients that will take their money and referrals elsewhere, and that truly can be the beginning of the end for your business.

When hard times hit companies, they often pull back the reins on spending and many times to a fault. Advertising and marketing are some of the first places that are cut back. But if you think about it, when you begin to remove your company’s voice from the marketing and advertising world, then you have just increased the ability of your competitors to reach even more customers by your absence  and thus increasing their market share. The best time to advertise and market is in a tough economy because there is less competition and it is simply easier to win.

So, when you are having to make tough budget decisions, elect to order a few less gel pens rather than cut back on your ability to service and reach new customers. This decision alone can help you not only sustain your business in tough economic times, but increase your market share when others are closing their doors.

In order for your business to save, it must obey the simple, yet profound principle of spending less than it makes. Large expenditures or one time costs must be analyzed and justified. All incoming bids and pricing must be compared. All expenditures should be negotiated and renegotiated with vendors when possible. In other words, don’t bite on their first estimate or offer.

The longer a company has been in business, the more things need to be analyzed because the accumulating costs of doing business rarely get reevaluated. Here are some smaller costs that often go overlooked when it comes to expenditures and lowering your overhead:

1. Cell phone plans, features, and minutes
2. Delivery charges
3. Shipping costs
4. Office supplies
5. Printing costs
6. Internet services
7. Computer repairs and support
8. Break room supplies
9. Add on charges for phone service

Now please keep in mind, that what we do not want to develop is a penny pincher mentality, which differs from the penny saver approach. The penny saver retains customer service and product quality whereas the penny pincher will sacrifice value and customer experience in order to save money. The penny saver is not cheap nor a scrounger. The penny pincher will cut costs with little consideration to the future outcome. The idea here is not to constantly change suppliers in an effort to save a couple of dollars.

So when you are making budget decisions, take a long look at how the additional savings will actually benefit the company and also consider if it will hurt the company in any way. Refuse to compromise your service and quality. The savings just are not worth it.

When you share your tweets with all of your followers, make sure that you include a “human side” to your posted messages too. It’s acceptable to let followers know some more personal non business  information such as, I just got out of a boring meeting, I can’t wait for the weekend, I lost my keys, I forgot to buy my wife’s birthday present,  I was late to work, I am going to my kids play, or I  just picked up Starbucks. I think you get the point here. By doing this, you will make your business more relatable to clients.

Besides posting your own posts on Twitter, you can share useful tweets with others. This is known as retweeting, and it is a vital part of the social experience within Twitter. When you are retweeting, you are sending tweets to your followers that you basically are endorsing that others have posted. Retweeting goes well beyond just giving someone credit for a good Twitter post. By doing it, you are letting your followers know that you value this person’s opinion, or you like this post, or you find this tweet helpful and informative.

The other side of retweeting is when others retweet you tweets. This can help you get your message out to the Twitter world much faster.

The most important aspect of your business is not your business plan, financing, current industry trends, ideas, employees, taxes, location, nor your health insurance plan. It’s having customers to serve. By far, this is always the number one rule of business. By having a customer, your business has now been validated. You now have someone to sell your product or services to. Rule number one is very simple, but you would be surprised how often it is overlooked.

You may not even have a business now, but don’t let that stop you from determining if you have a customer. How can I do this without a business you ask? You can achieve this by doing market research, using common sense, conducting some test marketing, and utilizing some deductive reasoning. Here are some examples that can get your brain churning. The toothpaste company that actually develops a toothpaste that whitens teeth knows that they have customers because of the number of people who spend large sums of money at dentists getting their teeth whitened. The lawyer who focuses on medical malpractice suits knows that they have a customer because of the large sums of money that can be won in a case for patients going through undue pain and suffering after being treated. The idea of ebay was brilliant because brick and mortar auction houses have been around conducting auctions forever.

To put it simply, having a customer is rule number one. Getting a customer is rule number two. Keeping the customer is rule number three. Following these three simple rules will keep you in business for as long as you want to be in business.

About 20 years ago, my uncle started a humble lawn care business in Ohio. He was in between a rock and a hard place when he started it.  He was recently married and had just lost his job. You might want to say that this was not the best way to impress his new wife.  He was a bit unsure of what exactly to do. He could apply elsewhere with hopes of gaining employment the old fashioned way, or he could try the unthinkable and start a new business of his own. It was unthinkable because nobody in our family had done that sort of thing before, and he just graduated from a high school that spent four years of his life teaching him to work for someone else. Today, there is an abundance of training on how to be a successful entrepreneur and small business owner. In fact, there are a handful of monthly magazines on the subject available too. But 20 years ago, you really were a lone ranger  if you were starting your own small business. Just recently he sold his 20 year old lawn care business to a major competitor. By doing this, he was able to have a home custom built in Florida. The best part of all this is that he paid cash for it all, and he doesn’t have a mortgage now. All of this was made possible with a lawn mower and some desire.

Now, I share this story to make this very important point. Your small business need not be a glamorous business to be profitable. It just needs to be ethical and meet a consumer need. Personally, I never knew that there was that much money in the lawn business, and I certainly don’t view it as glamorous. But, there sure are a lot of lawns in the world that need some TLC and a lot of owners that do not feel like dealing with them.

So as you consider various business opportunities, just remember that the business need not be glamorous to be both successful and profitable.