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to help you better manage your small business
Most small businesses operate on a thin margin. Income scarcely exceeds expenses, leaving little room to grow.
If this describes your situation, you might give some thought to your pricing. You might be letting your competition guide your pricing instead of the marketplace.
Markets for goods and services are all over the map. You can price low and attract bargain seekers. You can price to meet the competition and struggle to bring clients and customers to you. Or you can price higher and attract a higher end market segment.
Example: A hairdresser can struggle to make a living pricing haircuts at $10. Raise the price to $50 and the bargain seekers go elsewhere. Raise the price again, and you'll better define who seeks you out for that special haircut. By raising your prices you will serve fewer clients, but you can have a healthier bottom line.
Example: A baker will not sell many cupcakes carrying a price tag of $100 each. But that same baker can sell a creatively designed cake for a special occasion at $100 or more. Bargain hunters will buy cakes at the supermarket, but buyers who appreciate and can pay for creatively designed cakes will come to you.
This shows what can happen when you target certain market segments by raising your prices. Pricing positions your business in the public's minds.
Figuring out and targeting your client/customer base is crucial to growing a healthy business. Adjusting your pricing to a particular market segment helps you do this. You want to attract those who appreciate and will pay for your quality products/services and your superior customer service. You price to attract those types of people.
Example: A fabric artist who designs and sells women's accessories priced competitively with WalMart will struggle to make a living. By raising prices for a hand-painted scarf to $100 or more, however, the WalMart shoppers are weeded out in favor of a more appreciative crowd.
Example: A pet groomer who offers an inexpensive grooming service can double or triple prices by offering a little more. Get the word out to drop off your dog on your way to work and pick up after work. The groomer not only grooms, but "babysits" the dog all day. This convenience is worth much more to the customer.
Figure out what market segment you want to serve. Then set your prices to attract those people. You can build a healthier business by pricing to a higher end of the market.
Wednesday, October 7, 2015
Tuesday, October 6, 2015
Risky business
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If your mother had not taken the risk of carrying you to term, you would not be reading this. If you had not taken the risk of failing, you would not be in business.
Life is full of risks. A tree limb can fall on you, but you walk under trees. An oncoming vehicle can swerve in front of you, but you still drive here and there.
In business you are continually taking risks. You offer additional products and services. You tackle new markets. You change the way you manage.
At every turn, you face the danger of failing. Small or large, failure is always a possibility. The small failures prepare you to take the bigger risks.
Many small businesses never grow and expand because of the fear of failure. The massage therapist who could expand into a wellness center, but doesn't. The landscaper who could expand into a garden center, but doesn't. The tax specialist who could expand into a full accounting operation, but doesn't.
To grow a small business into a larger operation takes a dream, a plan, and a follow-up. Taking risks along the way is part of the game.
Of course, if you've built your small business to the size that you're comfortable with and you don't want to grow bigger, that's one thing. But if your dream is still not realized, then taking risks can get you there.
Example: Mary established her small bakery and tried baking all sorts of goodies until she settled on the mix of products that brought in retail customers and wholesale clients. She let the business "settle in" for a few years. Then, Mary decided that the time was right for taking the next step. She took a big loan, expanded into a second operation. She was on the way to franchising neighborhood bakeries. By taking the small risks over time, she was following her long term plan--and the biggest risk of her business life.
A funny thing happens to most business owners. They get into business and it works. Years of struggle establishing the operation finally are in the rear view mirror.
Then they become fearful that any changes will destroy what they have built. They begin to avoid the little risks, and the big risks are out of the question. They nibble around the edges of the business, never becoming what they could achieve.
Never take unnecessary risks. And, before taking a giant leap, always think through what you are about to do. That fear of failure can serve you well. Just don't let it keep you from taking the big risks. Your mother didn't hesitate carrying you.
When you run a business, you learn many things. Everything you do carries a risk, and not all risks turn out well. Learn from failure and keep on going toward your dream.
to help you better manage your small business
If your mother had not taken the risk of carrying you to term, you would not be reading this. If you had not taken the risk of failing, you would not be in business.
Life is full of risks. A tree limb can fall on you, but you walk under trees. An oncoming vehicle can swerve in front of you, but you still drive here and there.
In business you are continually taking risks. You offer additional products and services. You tackle new markets. You change the way you manage.
At every turn, you face the danger of failing. Small or large, failure is always a possibility. The small failures prepare you to take the bigger risks.
Many small businesses never grow and expand because of the fear of failure. The massage therapist who could expand into a wellness center, but doesn't. The landscaper who could expand into a garden center, but doesn't. The tax specialist who could expand into a full accounting operation, but doesn't.
To grow a small business into a larger operation takes a dream, a plan, and a follow-up. Taking risks along the way is part of the game.
Of course, if you've built your small business to the size that you're comfortable with and you don't want to grow bigger, that's one thing. But if your dream is still not realized, then taking risks can get you there.
Example: Mary established her small bakery and tried baking all sorts of goodies until she settled on the mix of products that brought in retail customers and wholesale clients. She let the business "settle in" for a few years. Then, Mary decided that the time was right for taking the next step. She took a big loan, expanded into a second operation. She was on the way to franchising neighborhood bakeries. By taking the small risks over time, she was following her long term plan--and the biggest risk of her business life.
A funny thing happens to most business owners. They get into business and it works. Years of struggle establishing the operation finally are in the rear view mirror.
Then they become fearful that any changes will destroy what they have built. They begin to avoid the little risks, and the big risks are out of the question. They nibble around the edges of the business, never becoming what they could achieve.
Never take unnecessary risks. And, before taking a giant leap, always think through what you are about to do. That fear of failure can serve you well. Just don't let it keep you from taking the big risks. Your mother didn't hesitate carrying you.
When you run a business, you learn many things. Everything you do carries a risk, and not all risks turn out well. Learn from failure and keep on going toward your dream.
Monday, October 5, 2015
Expanding naturally
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Expanding your business can be easier than you might think. It doesn't have to be a major undertaking. Rather, do more of what you already do.
Of course, doing more means offering more of the services you provide or selling more of the products you offer. If you are alone, it means hiring someone to help.
On the other hand, you might be able to expand into additional markets without adding more facilities or staff. It depends on the business you are in.
Example: Linda runs a traditional cafe, serving breakfast and lunch only. By 3 p.m. every day, she closes the door, cleans up and heads home. To expand, Linda began offering breakfasts featuring farm-fresh eggs and gluten-free French toast. Newly added lunches feature fresh greens delivered every day from a local farm, along with cheeses produced locally and free range chicken. The expansion worked. More customers came, and some asked if Linda would cater dinners at their place. Linda took on some catering jobs and gradually expanded in that area as well.
Example: Tom used to be a small independent website designer. He expanded his business by offering additional computer services. It happened almost accidentally when a client asked him to set up a new computer system. Tom saw how he could grow the business naturally, as an extension of what he already did. Now, he goes to clients and does most of his work at their site--it includes setting up computer systems, networking the computers, training employees, installing new software, and troubleshooting problems. Tom today has two vans and four technicians on the road helping clients.
Example: Therapists, nutritionists, chiropractors and other specialists can have trouble attracting interest and turning that interest into paying clients. Many of these experts are single-person businesses, meaning that they meet one-on-one with clients. This means that the number of clients served is limited by the number of hours in the day. There is no flexibility when the appointment calendar is filled. However, you can expand by adding a junior partner who takes some of the work load. Or you can add new clients by offering free demonstrations and talks at other venues.
You might be missing opportunities to expand. Rather than jumping off a financial cliff and establishing a new business venture, look to growing your way into your new and bigger business.
to help you better manage your small business
Expanding your business can be easier than you might think. It doesn't have to be a major undertaking. Rather, do more of what you already do.
Of course, doing more means offering more of the services you provide or selling more of the products you offer. If you are alone, it means hiring someone to help.
On the other hand, you might be able to expand into additional markets without adding more facilities or staff. It depends on the business you are in.
Example: Linda runs a traditional cafe, serving breakfast and lunch only. By 3 p.m. every day, she closes the door, cleans up and heads home. To expand, Linda began offering breakfasts featuring farm-fresh eggs and gluten-free French toast. Newly added lunches feature fresh greens delivered every day from a local farm, along with cheeses produced locally and free range chicken. The expansion worked. More customers came, and some asked if Linda would cater dinners at their place. Linda took on some catering jobs and gradually expanded in that area as well.
Example: Tom used to be a small independent website designer. He expanded his business by offering additional computer services. It happened almost accidentally when a client asked him to set up a new computer system. Tom saw how he could grow the business naturally, as an extension of what he already did. Now, he goes to clients and does most of his work at their site--it includes setting up computer systems, networking the computers, training employees, installing new software, and troubleshooting problems. Tom today has two vans and four technicians on the road helping clients.
Example: Therapists, nutritionists, chiropractors and other specialists can have trouble attracting interest and turning that interest into paying clients. Many of these experts are single-person businesses, meaning that they meet one-on-one with clients. This means that the number of clients served is limited by the number of hours in the day. There is no flexibility when the appointment calendar is filled. However, you can expand by adding a junior partner who takes some of the work load. Or you can add new clients by offering free demonstrations and talks at other venues.
You might be missing opportunities to expand. Rather than jumping off a financial cliff and establishing a new business venture, look to growing your way into your new and bigger business.
Friday, October 2, 2015
Social media markets
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to help you better manage your small business
New markets are springing up for your products and services. Much of this market explosion is driven by social media.
Time was, the reach of your small business was local. You were limited to the geographical area you served.
All that has changed for many small businesses. Social media is upon us, and you can reach a much bigger market. It's not just the local area but far beyond.
Of course, much depends on the business you run. Hot pizzas get cold with distant deliveries, and hot stone massages depend on local clients. But many products and services can be delivered long distance.
Example: Greg established a pet supply store in his town. His operation attracted attention, and his business is growing. He decided to tap into the market trend for fresh meat foods for dogs and cats. He promoted on social media, driving customers to his website. Orders came from the local area as well as from more distant places. Greg now ships fresh meat foods to customers far and near, and he has added expensive pet products to his offerings. He is tapping into the higher end market that is ignored or lost in the offerings by big pet product companies.
Example: Rick operates a vehicle accessories store that serves a wide, but local, market. He carries hundreds of products, including mats, parts, finishes, and other items. To attract more customers, Rick revised his website and posts regularly on social media. Today, he ships orders coming from far and near.
Example: Ella sells brownies--nothing else. She is not a baker, and she does not operate a bakery. She runs her business by arranging contract baking. She fills orders that arrive on her website. And she ships brownies every day via UPS and Fedex. Social media posts three times each week keep the orders coming in and the word going around.
Example: Dwayne is a CPA. He specializes in small business tax problems, accounting, and financial matters. He expanded his operation by offering webinars and training videos. These are sold over the net from his website. How to use QuickBooks and TurboTax are popular. This has led to Dwayne's expansion beyond the local area. Medium size businesses now fly him to their location to give seminars.
Products and services can be sold long distance. Social media can reach out and bring clients and customers not reachable before.
Expanding a small business is difficult. But social media today offers many opportunities to reach markets far beyond your local area.
Thursday, October 1, 2015
Selecting your future
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to help you better manage your small business.
Business owners face many decisions. It's an everyday activity that you do without much thought.
Six streets come together to form a big intersection near my home. One street leads to downtown. Another goes off to the Interstate highway. A third will take me to the supermarket. The others disappear into local neighborhoods.
Approaching this intersection, you must know ahead of time where you want to go. Waiting until you get there is not a good option.
So it is with business decisions. You frequently face big--and unexpected--intersections.
Example: Sue designs women's clothing. As a child she learned to sew and made multiple outfits for dolls. She went on to get a degree in design and established her business following a detailed business plan she had developed. When she got a proposal to join a major corporation heading up the company's design team, Sue turned it down without a second thought. When another company offered Sue a big contract to produce the company's line of fashions, she declined. Both of these offers would have led Sue into areas inconsistent with her plan to build her own dream business.
Example: Steve is an attorney who joined a big law firm. Dissatisfied, Steve left the firm and tacked his shingle to the door of his own small office. He saw an opportunity to become the go-to attorney for workers compensation cases. It has proved to be a valuable basis for his new practice. He handles other cases, but his dream is being realized.
Example: Marta is a second generation Italian-American. When she discovered that she was gluten intolerant, she went into action. From family contacts, Marta found that wheat flours from Italy did not affect her digestion. She made arrangements to import Italian flour and she offered these on her new website. She expanded by offering Italian cheeses, spices, even tomatoes. Marta supplies specialty food stores, restaurants and private parties. Now she is coming to a fork in the road. To grow to the next level, Marta will need a significant cash infusion. She could sell out to a big company, or go the investor route, or she could continue and grow more slowly. Marta is at a crossroads.
Your business plan helps you decide ahead of time which street you take when the intersection looms. The basic decision is still yours.
to help you better manage your small business.
Business owners face many decisions. It's an everyday activity that you do without much thought.
Six streets come together to form a big intersection near my home. One street leads to downtown. Another goes off to the Interstate highway. A third will take me to the supermarket. The others disappear into local neighborhoods.
Approaching this intersection, you must know ahead of time where you want to go. Waiting until you get there is not a good option.
So it is with business decisions. You frequently face big--and unexpected--intersections.
Example: Sue designs women's clothing. As a child she learned to sew and made multiple outfits for dolls. She went on to get a degree in design and established her business following a detailed business plan she had developed. When she got a proposal to join a major corporation heading up the company's design team, Sue turned it down without a second thought. When another company offered Sue a big contract to produce the company's line of fashions, she declined. Both of these offers would have led Sue into areas inconsistent with her plan to build her own dream business.
Example: Steve is an attorney who joined a big law firm. Dissatisfied, Steve left the firm and tacked his shingle to the door of his own small office. He saw an opportunity to become the go-to attorney for workers compensation cases. It has proved to be a valuable basis for his new practice. He handles other cases, but his dream is being realized.
Example: Marta is a second generation Italian-American. When she discovered that she was gluten intolerant, she went into action. From family contacts, Marta found that wheat flours from Italy did not affect her digestion. She made arrangements to import Italian flour and she offered these on her new website. She expanded by offering Italian cheeses, spices, even tomatoes. Marta supplies specialty food stores, restaurants and private parties. Now she is coming to a fork in the road. To grow to the next level, Marta will need a significant cash infusion. She could sell out to a big company, or go the investor route, or she could continue and grow more slowly. Marta is at a crossroads.
Your business plan helps you decide ahead of time which street you take when the intersection looms. The basic decision is still yours.
Wednesday, September 30, 2015
Expand with rentals
Free daily tips, information, advice and ideas
to help you better manage your small business
Rentals and rental related services are everywhere. We are a rental society. Rentals by other names pervade our daily lives.
People regularly rent apartments and vehicles. Rentals are available in movies, furniture, phone services, software, even costumes and dance floors. Even clothing, DJs and bands.
When you hail a taxi or call Uber, you are renting a ride. When you take your vehicle for repairs, you are renting expertise. When you get a massage from a therapist, you are renting expert services. And when you hire a landscaper or a plumber, you are renting a professional.
Example: Ray runs a local computer services firm. He installs new software for small businesses and trains employees to use it. When Ray convinced a client that a new computer system was needed to handle an expansion, the client asked Ray if he could rent the new setup. Quick thinking resulted in Ray's expanding into the computer rental business. Today, Ray's own growth is substantial--in rentals.
Example: Don loves the theater, but he is not an actor. His main interest is centered around set construction, props and stages. He turned his passion into a business--rentals of all the things needed for theater productions, corporate exhibits, organizational meetings, business dinners, and, of course, theater productions by community groups, high schools, bands and caterers. He has a warehouse filled with all sorts of spectacular props that clients eagerly seek. Sometimes he sells props, but his main business is rentals.
Example: Jeanie runs a flower shop. She specializes in fresh flowers and silk arrangements--selling to walk-in customers. She expanded her business when she began renting silk flower arrangements to banks, clinics, and corporations. She charges a monthly fee to place her flowers in offices and lobbies. She is now considering expanding her rental business to offer large containers of live green plants.
Many businesses can enhance the bottom line by offering rentals. Restaurant dining rooms can be rented to others for their meetings, or the restaurant can rent out the kitchen to aspiring bakers when the ovens are not being used. Artists and artisans can rent their works to others. Even maintenance contracts are a form of renting the on-going services by professionals. A new trend sees business women renting dressy outfits.
Put on your thinking cap. Adding rentals to your business offerings might be a quick way to enhance your bottom line.
to help you better manage your small business
Rentals and rental related services are everywhere. We are a rental society. Rentals by other names pervade our daily lives.
People regularly rent apartments and vehicles. Rentals are available in movies, furniture, phone services, software, even costumes and dance floors. Even clothing, DJs and bands.
When you hail a taxi or call Uber, you are renting a ride. When you take your vehicle for repairs, you are renting expertise. When you get a massage from a therapist, you are renting expert services. And when you hire a landscaper or a plumber, you are renting a professional.
Example: Ray runs a local computer services firm. He installs new software for small businesses and trains employees to use it. When Ray convinced a client that a new computer system was needed to handle an expansion, the client asked Ray if he could rent the new setup. Quick thinking resulted in Ray's expanding into the computer rental business. Today, Ray's own growth is substantial--in rentals.
Example: Don loves the theater, but he is not an actor. His main interest is centered around set construction, props and stages. He turned his passion into a business--rentals of all the things needed for theater productions, corporate exhibits, organizational meetings, business dinners, and, of course, theater productions by community groups, high schools, bands and caterers. He has a warehouse filled with all sorts of spectacular props that clients eagerly seek. Sometimes he sells props, but his main business is rentals.
Example: Jeanie runs a flower shop. She specializes in fresh flowers and silk arrangements--selling to walk-in customers. She expanded her business when she began renting silk flower arrangements to banks, clinics, and corporations. She charges a monthly fee to place her flowers in offices and lobbies. She is now considering expanding her rental business to offer large containers of live green plants.
Many businesses can enhance the bottom line by offering rentals. Restaurant dining rooms can be rented to others for their meetings, or the restaurant can rent out the kitchen to aspiring bakers when the ovens are not being used. Artists and artisans can rent their works to others. Even maintenance contracts are a form of renting the on-going services by professionals. A new trend sees business women renting dressy outfits.
Put on your thinking cap. Adding rentals to your business offerings might be a quick way to enhance your bottom line.
Tuesday, September 29, 2015
Pathways to growth
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to help you better manage your small business
Key employees are just that. They are key to building a business, keeping it healthy, expanding into the future. You are key. But you cannot do everything.
Small business owners who want to propel their operations into the big time frequently look outside for talented individuals. It's a matter of complementing internal capabilities.
Example: Jim runs a small firm specializing in solving the many technological difficulties experienced by small businesses when they attempt to promote their business on multiple social media platforms. (Whew!) To say it's complicated is an understatement. Many prospective clients do not understand the value of Jim's service when he attempts to sell his programs to them. Recognizing that he himself is lost in the weeds of technology, Jim hired Mary to pitch the service to prospective clients. Instead of concentrating on the technical aspects of Jim's services, Mary used her past experiences in small businesses of her own to "speak the language" of her targets. She concentrated more on the end game of growth and expansion than on the intricacies of social media platforms. She is adding more clients to Jim's firm.
Example: Bob runs a small printing operation. His interests are in providing the best end products, in satisfying his customers in a timely manner, and in staying on top of the latest technological developments in the printing industry. Bob let the business grow by the natural referral process--because he had little interest or time to sell his service. To kick his business up to the next level, Bob began searching for a suitable partner--someone who could fill the gap in marketing and sales. He found Ted and brought him on board. Ted was a printing broker with a client following. His clients placed orders with him and he arranged the actual printing with various printers in the area. When Ted joined with Bob, many more clients were quickly being served in the new operation. Together, the two of them embarked on building a much bigger operation than either could have done separately.
You can complement--and build--your business by looking for complementary people. But it can be much more than adding people.
Pathways to growth are many and varied. Additional services can enhance your appeal in the marketplace. Additional product lines can extend your reach in the community. Adding social media can explode your growth potential.
Whatever you do on your pathway to growth, do not neglect customer service. Give them what they want, when they want it, no questions asked.
to help you better manage your small business
Key employees are just that. They are key to building a business, keeping it healthy, expanding into the future. You are key. But you cannot do everything.
Small business owners who want to propel their operations into the big time frequently look outside for talented individuals. It's a matter of complementing internal capabilities.
Example: Jim runs a small firm specializing in solving the many technological difficulties experienced by small businesses when they attempt to promote their business on multiple social media platforms. (Whew!) To say it's complicated is an understatement. Many prospective clients do not understand the value of Jim's service when he attempts to sell his programs to them. Recognizing that he himself is lost in the weeds of technology, Jim hired Mary to pitch the service to prospective clients. Instead of concentrating on the technical aspects of Jim's services, Mary used her past experiences in small businesses of her own to "speak the language" of her targets. She concentrated more on the end game of growth and expansion than on the intricacies of social media platforms. She is adding more clients to Jim's firm.
Example: Bob runs a small printing operation. His interests are in providing the best end products, in satisfying his customers in a timely manner, and in staying on top of the latest technological developments in the printing industry. Bob let the business grow by the natural referral process--because he had little interest or time to sell his service. To kick his business up to the next level, Bob began searching for a suitable partner--someone who could fill the gap in marketing and sales. He found Ted and brought him on board. Ted was a printing broker with a client following. His clients placed orders with him and he arranged the actual printing with various printers in the area. When Ted joined with Bob, many more clients were quickly being served in the new operation. Together, the two of them embarked on building a much bigger operation than either could have done separately.
You can complement--and build--your business by looking for complementary people. But it can be much more than adding people.
Pathways to growth are many and varied. Additional services can enhance your appeal in the marketplace. Additional product lines can extend your reach in the community. Adding social media can explode your growth potential.
Whatever you do on your pathway to growth, do not neglect customer service. Give them what they want, when they want it, no questions asked.
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