The MyBusinessDashboard Blog: Small Business Dashboard Metrics Key Performance Indicators and Goals

Do Your Customers Thank You with their Payments?

I've always felt that a payment from a customer or client should be presented like a 'thank you' note.  It should be accompanied with jubilation, relief, happiness, excitement, etc.  If you have to ask, beg, or waterboard a payment out of your customer, then I'd say you didn't WOW them with your product, service, or price.

Most often, customers are paying us for their experience when doing business with us.  So, take a look at the experience you have designed for your customer.  At each step of the relationship, you shoud be creating a situation where the customer is simply being floored by your product, your service, and your price.  Then, they will hand over their hard-earned money with pleasure -- and even thankfully.

5 Mistakes that Can Ruin your Business and Destroy your Dreams: #3 Ignore the Profit and Loss Statements

This is the second in a series titled, "How to Ruin Your Business and Destroy Your Dreams!"  I originally presented this to the Chandler Chamber of Commerce.  The PowerPoint is available at www.MyBusiness-Advisors.com.

Today's mistake: Ingore your Profit and Loss Statement and other financial reports

Can you imagine losing weight without ever stepping on the scale?  Trying to run a profitable business without looking at your financial reports is the same thing.  You must monitor your progress, or lack thereof.  Look at your reports at brutal facts, not judgements.  They tell you a story, paint you a picture, that you must see.  Jim Collins in his book 'Good to Great' makes this exact point.  In order to turn things around, you must face the brutal facts.  You can find those brutal facts in your financial statements.

Running a profitable small business can really be boilded down to three numbers: Revenue, Gross Profit, and Net Profit.  This becomes an exercise in Sales, reducing cost of goods and reducing expenses (including taxes).  Start working this like a business owner, and you will start to see the benefits.

SWA: Sticking to Their Mission

I've used Southwest Airlines' mission statement as a good example for years.  I checked today, and it's still the same:

"The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit."

Notice they don't mention WHAT they do, but HOW they do it.

Here's a great example:

SciAm: How to Green Up Your Office

This article at Scientific American has three simple ways to 'Green Up' your office.  If you want to do your part, give the article a quick read.

5 Mistakes that Can Ruin Your Business and Destroy Your Dreams: #2 Change Your Marketing Plan Every Month or So

This is the second in a series titled, "How to Ruin Your Business and Destroy Your Dreams!"  I originally presented this to the Chandler Chamber of Commerce.  The PowerPoint is available at www.MyBusiness-Advisors.com.

Today's mistake: Change Your Marketing Plan Every Month or So

An exercise I often take a new client through is to go through all their marketing/advertising efforts for the past year.  It's a fun exercise to go through, because we always end up with a mountain of failed campaigns.  This mountain is built as the client grabs a flyer, magazine ad, or direct mail piece, throws it into the pile, saying, "Did this for a month, didn't work!"  There starts to become a clear pattern: tried it for a month and it didn't work.

The trick is to do research, analyze your market, THEN launch a marketing campaign.  Commit to that campaign for AT LEAST six months.  Analyze the results quarterly and make very small, deliberate adjustments as you go.  This will ensure that you create a well-oiled, targeted campaign that brings in business.  That way, when your business coach visits, you can say, "Over the pas twelve months, I've done these three campaigns and gotten a 300% return on my investment!"

Low-Price Esteem: How to Set Your Prices and Remain Profitable

I've seen too many small businesses that suffer from low price esteem.  In other words, they feel that they have to win the sale based on price alone, that their customers will go elsewhere if they were to charge a higher price.  Now, if you are marketing to the masses and your strategy is low-price, then that's true (and you're Walmart).  Otherwise, you are digging yourself into a gross margin hole by undercutting yourself.

Gross Margin.  Take your profit on a sale, divide it by the total sale price.  That's your gross margin.  Start thinking in margins and stop thinking in 'mark-up'.  Your company will live or die by these margins.

There are two things to consider when pricing your products:

1. Your price is set by your customers based on their perception of the value.
2. As a good friend of mine points out, "People enjoy buying things they want; they hate paying for things they need."

So, how can you affect your price and still sell your goods?  Three ways:

1. Do it faster: produce or deliver your product faster than your competition
2. Do it better: go that extra mile for your customers.
3. Do it for a small niche: if you are in small supply, demand will raise your value.

The bottom line is the bottom line: profits.  The higher your top line, the more makes all the way to the bottom.  If your business suffers from low-price esteem, seek supply and demand counseling immediately!

WSJ: Stimulus Plan Includes Help for Small Business

From the Wall Street Journal:

"White House officials on Monday night pointed to $730 million from the stimulus plan that went to the Small Business Administration to reduce small-business fees and guarantee a greater share of some SBA loans. The Obama budget would authorize the SBA to support $28 billion in lending guarantees."

Read the full article.

Success in Hiring with the Group Interview

Through one of my clients, I learned about the group interview technique.  Basically, it is an interview of a few candidates all at the same time, conducted by the key members of your team.  I loved the idea and had experience with it from my time in the Army, so I recommended it to another client.  Additionally, I've always said the best way to turn around a company is by building a winning team.

This past week, this client of mine conducted the group interview of five candidates.  The candidates were all very qualified and professional.  I was very impressed.  To interview them all separately would have taken about 2-3 hours.  In doing it as a group, we were able to get all five done in forty-five minutes.

Here's how to conduct a group interview for a new hire:

1. Let them all know about the process ahead of time.
2. Make a location which will accommodate the candidates and your team
3. Have a list of good questions ready to go.
4. As you ask the questions, allow your team to ask follow ups.
5. Direct each new question to a different candidate, to be sure they all get a chance to speak up.
6. Do NOT force them to compete directly with each other.

I have found over time that there are two key questions to ask.  In this past interview, the first question was a real key in selecting the best person.  Here they are:

1. Tell me about a mistake you made while on the job...a real doozy of a mistake.
2. If you could write your ideal job title and description, what would it be.

The first question gets to a person's character and how they accept responsibility.  Be wary of someone who blames other for their mistake.  The second question lets you know if the candidate is the right fit for the position in question.

Unfortunately, there is a pool of super-qualified candidates out there.  If your team needs a makeover, now is the time.  Make that change with a group interview and hire great, new talent.

5 Mistakes that Can Ruin Your Business and Destroy Your Dreams: #1 Do It Without a Business Plan

This is the first in a series titled, "How to Ruin Your Business and Destroy Your Dreams!"  I originally presented this to the Chandler Chamber of Commerce.  The PowerPoint is available at www.MyBusiness-Advisors.com.

Today's mistake: Do It Without a Business Plan.

Too many small business owners trying to make a success out of their businesses go forth without a business plan.  When I present this to a group, I usually ask, "How many of you have a business plan?  How many of you use it?"  Almost invariably, the percent of the group who have a business plan and use it is about 10-20%.  It is very hard to accomplish anything without a good plan.

So, the remedy here is easy: write yourself a business plan!  Unless you're looking for capital/investment, you don't need to write the full-blown, 100-page business plan.  What you need is four key sections:

• Sales and Marketing Plan
• Strategic Analysis
• Operations Plan
• Financial Plan

These plans will shed an important light on your business, help you really understand what it will take to make your small business a success, and lay out your action plan to get there.

If I had to boil this down into a simple piece of advice, it would be this: set goals.  That is what your business plan will help you do.  Set some goals, create your metrics (or key performance indicators), and track your progress.

NY Times: Business Opportunities Abound, Even in Bad Times

JOB losses, falling property values, more people without health insurance. With the current state of the economy so bleak, those are the issues getting a lot of attention. But they are not the whole picture...(read more at NYTimes.com).

As we all stop watching/reading the news, it is nice for the Times to bring us these four good-news stories for small business success in hard times.