Irving R. Levine

Irving R. Levine was a financial reporter who died last year.  That statement was tongue in cheeck but when it came to money and finances, he was right on target.

Money can make the difference between a successful business and a failed one.  That is why it is so important to create a feasibility plan when starting your new business.  You need to know how much money you are going to need to start and operate your business during the first three years — and, just as important, where that money is coming from. 

Are you going to be able to make a profit, break even, or is it looking more like a loss?  What expenses will you have?  What is your projected income (and be realistic).  This is not the time to let the “dreamer” side of you take control.

If you are going to be a one-person operation, can you reasonably put in enough hours to create the products or produce the services that will be required to make the income you are projecting?  And don’t forget that a one-person operation has to do much more than just produce products and services.  What about the time necessary for marketing?  For billing?  For ordering products?  And for all the other parts of conducting a business.

If you’re starting or operating your business without any kind of financial plan, you’re playing Russian Roulette!

Just as soon as one enemy is eliminated, new ones pop up.  Your enemies mean business.  They want your business, your customers, and your profits.  They want to put you out of business so they can have it all to themselves. 

Scary, isn’t it?  But it doesn’t have to be.  Your competitors may be bigger than you, have more money to spend than you, and even have created a brand that is promoted with full-color catalogs, expensive websites, and media ads.  But they can’t outspend you in ways that money can’t buy.

In today’s economy, the playing field is going to become even more level as customers spend less while seeking more for their money.   Even the giants in the industry are going to suffer – not necessarily as a result of just the economy but from their own failures to look ahead, tighten their belts, and determine what is important to their customers. 

Look at the graveyard of failures already in our national cemetery.  The behemoths, the giants, those we thought would never fall.  Enron, Fannie Mae, Merrill Lynch.  The list goes on even as more and more corporate giants are falling ill.

But you, as a micro business, have an advantage that these giants don’t have.  You aren’t blinded by the vastness of the territory.  Your vision isn’t hampered by numerous employees, marketing strategies, and owner greed.  You can zoom in on what is important to you as a reputable business owner and what is important to your customers.  You can make changes quickly.  You can offer benefits that the larger companies can’t.  You can create a very personal business that will make every customer feel as if he or she is your only customer. 

You don’t have a lot of money to spend, so with proper research and planning, you can spend it wisely.  You have the ability to look at your big picture while still zeroing in on the little things within your business that can increase your profit margin.  You can watch your bottom line as closely as your customers are watching theirs. You can easily implement high impact, low cost strategies for getting and keeping customers using more time, energy, and imagination than money.

Okay, so how do we do it?

The very first step is to determine what needs to be done and then list them by priority.  Don’t just charge into the jungle and make changes in your strategies without careful thought.  Step back and look at the overall jungle.  Look at the market with fresh eyes and learn everything you don’t already know about your business.  You already know that prices of everything, from products to shipping, are on the rise.  You know that customer resistance is going to be higher.  But also look at how other companies are handling the changes and see if you can handle them better.  How are other companies marketing their business and what can you do to make yours stand out in the crowd?

Look back on your own experiences as a customer.  What could have been done to make you a loyal customer instead of a “I’ll never buy one of those again” kind of customer.  Regardless of what is said, the customer is not always right.  But the successful customer service rep makes them feel satisfied even if they didn’t get exactly what they wanted. 

Determine what weapons you need to compete effectively.  Your competitors are getting smarter every day.  They’re reading industry and business books and magazines.  They’re attending seminars and tradeshows.  While they are learning, you can’t afford not to.  But you also can’t afford not to take action on what you know is needed.  And remind yourself that what you would like to have is not necessarily what is needed.

There are only two ways to increase profits.  Cut expenses or increase sales.  We’ll look at both but let’s start with expenses. 

Drag out your accounting records and look at each and every expense.  What could be cut without affecting your products or customers?   Slash every bit of fat in your business.  In the recent presidential election, one candidate said he would slash spending across the board while the other more wisely said he would do a line by line review, cutting the things that weren’t working while increasing spending on those that were.  This is the approach you should take.

It has been said that time is money.  The truth is time is far more important than money.  Time and energy can even be an effective trade for lack of money.  Are you buying packing materials when you could find local businesses that will save theirs for you?  Do you have too many employees doing things that you could do more efficiently?  Do you have systems in place that makes it easy for you or an employee to handle every aspect of your business?  But also are you hiring others to do those things that your time is too valuable to do?  If you overestimate your own abilities, your business may suffer just as much as if you underestimate them.

Look at what sells and what doesn’t.  If you offer a product line that gets very few sales, perhaps you should eliminate that line so that you can concentrate on what sells best.  Only you can do this because only you really know your business.

If you already have customers, they are your most valuable asset.  Nurture them and do everything you can to create their loyalty to you.  If a problem is even hinted at, address it immediately.  Don’t leave that job to an employee.  And if you have employees, be aware of how they are handling your customers.  If you’re not careful, they can lose them for you.  Employees, that aren’t watched carefully, have been known to destroy a business. 

Information about marketing effectively would take more space than I have in this column so I’m going to touch on some of the main things to remember. 

Put planning ahead of everything else.  Only with planning can you know who you are, where you’re going, and how you’re going to get there.  Planning keeps you and your business organized and efficient.  Create a marketing calendar and use it as your road map to your goals. Reevaluate that plan regularly and be flexible.  If something isn’t working, change it.  If something is working better than expected, determine why and how you can build on it. 

Along with that planning, make a list of all the good things you offer to your customers.  Make it a long list.  Ask your customers why they buy from you and add their answers to the list.  Of course, your competitors offer many of the same benefits but there are those that are unique to you alone.  These benefits are your competitive advantage and what should be pushing your marketing.

Blow your own horn.  If you don’t, who will?  Find ways to tell people what you are doing, how well you are doing it, and why your products and services are far superior to what they can buy from your competitors. 

Marketing your business locally should include sending periodic press releases to the media, networking with other business owners or potential customers, speaking before clubs and organizations, building referral programs, and face-to-face contact.  If you love your business and are enthusiastic, it will show. Print ads are rarely effective unless you have the funds to run them regularly.  Periodic mailings to targeted potential customers are usually more effective.  Email newsletters are about the most inexpensive way to use print marketing.

Accept the fact that technology is important in today’s business world.  The ability to type, use computers, understand the internet and how to use it effectively is more important than ever.  If you don’t have the ability and find it difficult to learn, find someone that you trust to handle this part of your business.    Technical advancements give you more time to do what must be done rather than doing busywork.  Even marketing in your local area is more and more dependent on technology.  You can create a proposal, including photographs, and transmit it to a potential customer by email.  You can stay in touch with existing customers via email much more easily and regularly than by mail and phone.  Having a website, even if it is just an online brochure for your local business, is expected by many in the business world.  And, of course, marketing your business via the internet, using optimization and other skills, opens your business up to a whole new level.

When you opened your business, you entered the jungle.  How you traverse it depends on your attitudes, the weapons you choose, your determination and commitment.  You may decide that this jungle is not for you or you may love and embrace the challenge.  Either way, the decisions you make daily will determine your success as well as your enjoyment.

This article, written by Joyce Reid, was originally printed as a “Reid On. . .” column in Rave Reviews, the leading national full-color trade magazine for the gift basket industry.

Guest Blogger, Laura Wheeler of Firelight Business Enterprises, shares the following tips with us:
Right now we are seeing prices rising left and right. Are you one of the businesses that is having to raise prices? If so, it might be time for a productivity and efficiency analysis. This is something you do for yourself. Take a long hard look at your business and consider the following:

1. Where is the primary value for the customer? Is there anything you can cut that won’t interfere with the primary value?

2. Can you offer a lower cost option, to still keep some of the customers you may lose if you do have to raise prices on what you sell now?

3. Look around your daily routine. Is there anywhere that you are doing repetitive tasks that could be sped up by using a form, a template, or a system that streamlines the process? Can you create boilerplate text for common communications, or create a handbook to give clients instead of having to tell them the same things over and over?

4. Consider time management and organization of tasks. Are there ways in which time is being wasted, or resources are wasted where better scheduling could lift some of the load? For example, consolidating travel – which takes both time and money, or scheduling phone calls for lower cost call times? Can you batch operations which will save time if you do? For example, with one client, if I know she has a batch of changes for her site, I won’t do any of them until she has all the requests in (she knows this). I have to open the program, find the files, and upload the files to the server each time I update her site. If I batch process the changes, then I only have to do those things once, for many changes, instead of many times – a savings.

5. Are there other areas where you can economize that do not cut into quality? Can you communicate more by email and less by phone, or create a newsletter for routine communications so you can communicate with many clients at once instead of having to explain something over and over?

Don’t just look at the cost of supplies or product. Also look at reducing administrative overhead by making things faster. Save time, save money, sell more in the same time. Look first to your operations – doing so will not only help you conserve in ways that do not harm the customer, it will help you to grow more smoothly.

In the book “The Hitchhiker’s Guide to the Galaxy,” after
Earth is blown up, Arthur (the main character) is presented
with a small computer (not unlike an iPhone I’d imagine)
with these words on the front — “Don’t panic.” Arthur finds
this oddly comforting, even though Earth is gone and he is
on a spaceship with a guy he really didn’t get along with
too well when they were both on Earth.

Although no one said those words, that was the underlying
theme of this past Dan Kennedy/Bill Glazer Superconference.
Don’t panic. Yes we’re in a recession. Yes the government is
doing crazy things. Yes we have pirates and pig flu and
everything else. But you shouldn’t be panicking because it’s
very possible for us to not just survive but thrive. (Hey,
if Arthur can keep from panicking after watching the end of
the world, we should have no problems.)

So what can we do? In a word — lots. Here are 3 things to
get you started:

1. Don’t allow what’s going on to paralyze you. Over and
over again we kept hearing stories about business owners who
have just stopped doing anything. Whether it’s from fear or
because they believe it’s not going to make a difference so
why bother or they think this is smart to hunker down and do
nothing while they wait things out, the end result is
they’re frozen. And because they’re frozen, their businesses
are dying.

Now is not the time to be doing nothing. Now is the time to
be doing something. Lots of things. Like marketing. Lots of
marketing. In fact, this is an excellent time to be
marketing because your competition is probably panicking and
frozen and hiding in a closet somewhere, so you have the
chance to not only solidify YOUR position but take customers
away from your competition.

2. Work harder. Ivanka Trump came and spoke to us, and the
biggest thing I took from her is she works 16-hour days. Yes
she’s rich. Yes she has a trust fund. Yes she’s in the
family business. And she works her little tush off.

Now, I’m not necessarily advocating ignoring your family and
your health and everything else and just focusing on your
business. What I AM saying is if your business isn’t where
you want it to be, rather than shutting down or doing less,
try doing more. Whether that looks like hiring someone to do
a marketing campaign for you or you get some systems in
place to free up your time so you can focus on other things
or you roll up your sleeves and do things you wouldn’t
normally do, you might need to do more right now rather then
less.

3. Fix any fundamental flaws. Dan said what’s really
happening right now is the recession is exposing flaws in
businesses that were always there, it’s just before the
businesses were making money despite those flaws. So, again,
don’t panic, don’t shut down, and look at this as an
opportunity. You’re able to fix problems in your business so
when we do come out of the recession, your business will be
that much stronger.

And the most important thing to remember — don’t panic. You
CAN not only survive this but thrive.

Instead, it was an email selling business cards.  And, the surprising thing about it was that , when I clicked to the site, it looked amazingly identical to the VistaPrint site.  It’s easy enough for companies to partner with other companies with a dropship program.  Some of these companies even offer a branded website.  Many of us in the gift basket business take advantage of the dropship option in order to provide larger selections for our customers without having to carry the inventory.

But fedex?  I was surprised.  But, considering the recession we’re currently in, I guess even the giants in the various industries have to do what it takes to survive — even if it means branching out into a field that has no relation to their core service. 

We, as small business owners, can learn from fedex’s decision.  If our core business isn’t making enough money, think outside the box and see what you can add that will provide additional income.  Dropshipping is one option, but be careful!  There are good dropship companies and there are others that will destroy your credibibility, but that’s another whole article.

What are you doing to increase your income?

As a result, Americans have become more conservative in their spending — which is not a bad thing.  Those of us, who are old enough to remember the days when your every whim and desire couldn’t be added to a credit card or purchased for nothing down, are shaking our heads as we say “we told you so.”

But all these changes–which any intelligent person could have seen coming–don’t mean that every business is in a “hide the cash under the mattress and wait it out” mode.  As a matter of fact, the great depression, as well as other times of recession, have proven that companies which are proactive during a recession come out far ahead of those companies that adopt a “hold it steady and wait and see” attitude. 

We have to remember that a recession doesn’t mean that people stop buying.  It means that the blinders of “easy credit” have been removed from their eyes and they are more cautious about what they buy.  Value for their dollar is suddenly important to them.  But what is value?

Value is diferent things to different people.  It could be a purchase with a discount.  For another person, it could mean buying a product or gift basket that is easy to order, looks like it’s worth what they paid for it, and is delivered promptly with no hassles.  What we, as business owners, have to determine is what our customers see as “real value” and then give it to them.

Customers will continue buying gifts even in a down economy.  They still like to say Thank You, Welcome to that new baby, Get Well, Happy Birthday, and even I Miss You.  But they look more carefully at what they buy and they look for a gift that gives them the biggest bang for their buck while being able to keep some of those bucks in their wallet.

“Ah,” you may be thinking, “I’ll just cut prices and downsize my profits.”  But cheap isn’t the answer.  Value is the answer.  Even in a down economy, people are still buying expensive gifts when it is important to them and when they feel the value is there.  These people may be using coupons at the grocery store for the first time, cutting back on going to the movies or out to dinner, but they are willing to pay more for a gift that makes them look good or feel appreciated.  Consumers don’t stop buying in a recession.  They just need to know that what they are receiving for their money is going to be worth it to them.

In order to provide this “value”, we have to look at our own businesses and see what we can do differently.  Trimming our inventory levels and buying products that enable us to create baskets that offer value is necessary.  Looking at our expenses and determining how we can control them while still offering high levels of service is important.  Thinking more about your customer’s needs and desires should be at the fore front of your marketing.

Your job as a smart business owner is to provide value and convince your customers that it exists.  If you can do that, profits are still here to be had.

Your comments to any of these posts are always welcomed.

Now most of us, as small micro businesses, don’t have the funds to print full-color slick catalogs of the L.L. Bean quality but we can perhaps swipe an idea that the company used in a letter from the company’s President/CEO to its customers. 

The letter begins “Today while many familes are looking for ways to stretch their budget, they’re often challenged to make the difficult decision between quality and price.  At L.L. Bean, we’ve never offered a choice — we’ve always insisted on both.”  He then refers to what he calls “Bean Value” items — many of which are customer favorites–whose prices haven’t gone up in price in years.  In some cases, the prices have actually gone down.  “We’ve never played games with prices — in good times or bad,” he continues.

I’m not suggesting that you copy this letter but to use the basic idea to reassure your own customers that you are concerned about their budget and to tell them what you are doing about it.

Add your comment telling us what you are doing to reassure your own customers.

                      Irving R. Levine

Irving R. Levine was a financial reporter who died today.  That statement was tongue in cheeck but when it came to money and finances, he was right on target.

Money can make the difference between a successful business and a failed one.  That is why it is so important to create a feasibility plan when starting your new business.  You need to know how much money you are going to need to start and operate your business during the first three years — and, just as important, where that money is coming from. 

Are you going to be able to make a profit, break even, or is it looking more like a loss?  What expenses will you have?  What is your projected income (and be realistic).  This is not the time to let the “dreamer” side of you take control.

If you are going to be a one-person operation, can you reasonably put in enough hours to create the products or produce the services that will be required to make the income you are projecting?  And don’t forget that a one-person operation has to do much more than just produce products and services.  What about the time necessary for marketing?  For billing?  For ordering products?  And for all the other parts of conducting a business.

If you’re starting or operating your business without any kind of financial plan, you’re playing Russian Roulette!

Shipping those packages doesn’t have to break the bank or scare off your customers though.  Having a little bit of information and surfing to the right websites can save you time and money and keep your customers happy. 

First, where do you buy those boxes you pack the gifts in?  Check your yellow pages for local suppliers to save on shipping.  But then also check www.uline.com for great prices and quick shipment of boxes of all sizes.  Even with the cost of having them shipped from Los Angeles (and they have shipping locations all over the country) to Flagstaff, their boxes are much cheaper than I can buy locally.  For the large rolls of packing paper which are HEAVY, I take advantage of Nashville Wraps occasional free shipping offer and place a large order which includes several rolls of that packing paper.

Now that DHL is no longer in business, shipping options are UPS, Fedex, or USPO.  Deciding on which carrier to use for which size package and which delivery service means navigating an alphabet soup of options.  You just don’t have the time to figure out which service delivers the best value. 

Enter Shipping Sidekick at www.shippingsidekick.com, a service that simplifies the task.  You fill in a form with zip code you’re mailing from, zipcode you’re mailing to, weight of package, and a couple other details.  In return, you get a list of all the different options available to you from all three carriers.  Some of the results may surprise you.  The cheapest choice is often the one you least expected.  Shipping Sidekick takes it rates straight from the carriers and in real time.   This website used to have a subscription fee but now it’s FREE.  You have to put up with looking at a few ads as it calculates the rates but that’s worth the time saved.  A quick tip:  Select the “oversized packaging” option, which lets you input the specific dimensions of you box and receive more accurate rates. 

I save on shipping charges by doing all my shipping labels online and am fortunate enough to have a UPS Store (where you can drop off packages with internet generated labels at no extra charge) and the Post Office located just a few blocks from me.  I do a once-a-day drop-off and save the UPS daily pickup fees.  The Post Office will pick up at no charge but you have to schedule that pickup no later than 2:00 a.m. the night before. 

If you’re shipping smaller packages (such as the teddy bears that I ship from my website www.grandcanyonteddybears.com), you’ll find priority mail shipping to be very reasonable and there are no surcharges for home delivery.  You can also order FREE shipping boxes of various sizes from the Post Office website and even have them delivered free to you.  But it is a federal offense to use these boxes with any other carrier.  Using priority mail, I can ship smaller size gifts (such as those created in the small boxco boxes) from Arizona to the East Coast for less than $10 and have them arrive in 2-3 business days.

You can save time spent standing in line at the post office by using a web-based postage service such as Endicia or Stamps.com but you can have the same service for free at usps.com.  There is even an 11 percent discount on postage printed out at usps.com.  This service is only available for priority or express mail, however.  If you need to ship first class or parcel post, another option is the business shipping service available at paypal.com.  There’s no discount but no extra charge for the service either.

Another shipping option that can save money is one that I have just discovered but have not used yet.  You might want to check it out and see if it works for you.  eShipper at www.eshipper.com offers discounted shipping.  How?  The company ships enough packages with each major carrier to get great corporate rates.  General manager Rick Wray says, “If you have a lot of volume that you’re shipping, then your rates are going to be cheaper.”  A secret to remember:  You can avoid the $20 enrollment fee by clicking to the site from several partners including Shipping Sidkick.