Every business experiences a time where they need new customers but just don’t have the advertising budget. For this I recommend four things.
Every business experiences a time where they need new customers but just don’t have the advertising budget. For this I recommend four things.
First, get into today’s Yellow Pages. In the past it was key that you get your business into the Yellow Pages so that people ready to buy now could find you. In most markets today the Yellow Pages just don’t work as well. Today you need show up on the first page of a Google Search or the online Yellow Pages. It is so important that any marketing budget you can afford should first be spent here.
Second, look for ways to increase sales from current customers. This is often the quickest and easiest way to increase sales since your customers know you, like you, and trust you. Check out our article in our blog titled “Fastest Way to Grow Your Business!” (https://bit.ly/2Vz4vVT).
Third, identify your ideal customers who you can reach by mail. Yes mail! (Check out NO B.S. Direct Marketing by Dan Kennedy to learn how.) Not doing what everyone else is doing is a great way to stand out. Then design a three-step mail campaign to get prospects to call you. The advantage is that you can print and mail what you can afford. If you can only afford $50 this week, then only send out 100 letters to prospects. If next week you can afford $75, then mail another 150 letters to prospects. Continue this pattern each week based on your cash availability.
Finally, you may not have money but you usually have time. Get out of your chair and hit the streets. Stop in on prospects and introduce yourself. Pick up the phone and make calls. Email your contacts. Just get out there and make yourself known.
Doing these things usually starts to generate sales and cash that will allow you to expand into paid advertising. But I have found that this is a great way to start when your cash is short.
Myths are harmless for most people. But when a business owner believes a myth, it can cause business failure. Let's discuss those that can hurt a business.
Myth: A widely held but false belief or idea.
Myths are harmless for most people. They can believe them without any real negative effects. But when a business owner believes a myth, it can cause business failure or stagnation.
I’ll use myself as an example. As a CPA who had assisted many business owners before starting my own business, I thought I knew exactly what was required to open and run a business. I could not have been more wrong!
This brings us to the number one myth that new business owners fool themselves with when they first start out:
Myth:I know what it takes to run a business because I have studied other business owners and have done my research.The truth: The responsibilities, pressures, and demands of running a business can only be understood by those who have actually started and owned a business. Much like getting married, becoming a parent, or learning to drive a car; there is no single course, book, or experience that will prepare you for the experience of being a business owner. Expect to be challenged and pushed to your limits almost daily.
Unfortunately, this is only one of the many myths stopping business owners from growing the businesses of their dreams. Every day I speak to business owners who are struggling with the hard truths that must be learned to be successful. Here are some of the most common and destructive myths:
Myth:All I need to succeed is a good idea. The truth: Every business owner thinks they can offer their customers something better than their competition. But there are few truly original ideas. Even Apple's Steve Jobs didn't invent something new when he introduced the iPod, iPhone, or iPad. He saw an opportunity to create a new product by improving or combining existing technologies in a way that the market would love.
Myth:Offer a great product, and customers will beat a path to your door. The truth: Steve Jobs didn't use the "Field of Dreams" method to market his products. Apple is a master of marketing and sales. Every business owner must understand one thing--every business is a marketing business first! Every business owner must become an expert at sales and marketing.
Myth:Success depends on hard work. The truth: Yes, you will work hard, harder than you may have ever worked before. Trust me; 40-hour weeks are going to become things of the past. But working hard isn't enough. You have to work on the right things. Start by setting goals and deciding how to reach them.
Myth:I can be my own boss. The truth: You may be in charge, but you aren't the boss. My name is on the door, but I have hundreds of bosses. Every client is your boss. Even your employees are your bosses sometimes. You might get to decide who you work with, but whatever work you do accept must be delivered in a quality way. That delivery of a quality product or service that the market is willing to pay for is your new boss!
And you can't do it alone if you want to grow. Accordingly, hiring quality employees is essential. It is your responsibility to find the right people, train them well, and give them the tools they require in order to produce the quality products or services the market expects.
Myth:I can set my own salary.The truth: Most business owners were successful and making good money before they became owners. In fact, it took me almost 12 years to get back to the same level of income I was making at my last job! With a new business, most of the early profits must be re-invested in order for the business to grow. Sure, many business owners make a very comfortable living, but only after they have met a need that the market pays them well for. (Yes, I am repeating myself. It's that important!)
Myth:I will make a profit quickly. The truth: You will learn that in business, everything takes twice as long and costs three times as much as you expect. Expect the unexpected and plan for it. Always have two or three times the funds you think you will need to start the business, open a new store, or launch a new product.
Myth:I can take more time away from work. The truth: A new business is like a newborn baby. It needs constant attention. The most successful business owners work many long hours and are always striving to improve their businesses. To be successful you must achieve this single-minded focus on making your business a success.
Myth:I can't compete with the national chains. The truth: The national chains can't compete with you! You are closer to the customers than the managers of these large chains. You can spot market trends much sooner, and because you don't have the large infrastructure that they have, you can respond much more quickly. Plus, you can build a very good business from the small niches the big chains don't want.
Finally, perhaps the most dangerous myth that almost all new business owners (and even many experienced business owners) fall prey to:
Myth:I know all I need to know about running my business. The truth: The biggest problem is not what you don't know. Rather, the biggest problem is that you don't know what you don't know. A successful business owner never stops learning. They concentrate on improving all of their business skills. They read books, hire coaches, go to conferences and seminars, and learn from what other business owners are doing right and wrong.
In this video I discuss the 3 major rules of to follow to answer the most important question of "Why should I buy from you?"
Just about every marketing book stresses the importance of having a successful “unique selling proposition” (USP). This is often called a unique selling point, unique selling position, or even a unique selling product.
But many times they fail to follow the 3 major rules of a successful USP. These were introduced by Robert Reeves in his book Reality in Advertising which was published way back in 1961. And yes, he was one of the Mad Men that the popular TV show is loosely based on).
Mr. Reeves argues that being different isn’t enough. To be truly successful your USP (unique selling position) must:
Offer a benefit your prospect truly wants, needs, desires. It should really offer a benefit your prospect can’t get unless they buy your product/service. It should say, “Buy this product, for this specific benefit.”
Deliver a clear difference from the competitor’s product. Is your product exactly the same product sold by your competitor? When a customer loads your website or walks into your store, is it exactly like your competitor’s website or store? Your benefit must be one that your competition cannot or does not offer. It must be unique.
This difference must be huge! Your prospect should take notice and immediately see why this difference means buying from you is the only smart choice. Remember, a USP must be strong enough to attract new
In this video I discuss why NOW is the perfect time to grow a massively profitable business--even in these tough economic times!
Starting a business is risky. Very few businesses last 10 years, and even fewer actually achieve massive profits. So why do so few businesses achieve this level of success? A more important question is, what do the businesses that achieve massive profits do differently from the other 99 percent of businesses? My experience over the last 30+ years of working with thousands of business owners has taught me that successful companies add action to good ideas.
These owners see what their competitors are doing and do the opposite. Why? Because it makes sense! Remember, 80 percent of start-up businesses don’t last five years and only five percent of the surviving companies actually achieve massive growth and profits. So why copy your competitors if 99 percent of all startups fail to survive or make massive profits? Obviously, most of them are not doing the right things. See what they are doing and then do something else!
Industrious business owners have good ideas and are able to identify and market their Unique Selling Proposition (USP). They know how to advertise their product or service to the consumer in a way that answers that all-important question: Out of all the choices available to the customer, including doing nothing, why should they buy from you?
Successful business owners know how to increase sales. They understand that every business is a marketing business. They become experts at marketing and selling their products and services. These uber-successful businesses spend the vast majority of their time getting new customers and upselling to their current customers. They work at providing legendary customer service that leads to happy customers and regular referrals.
They understand that profits, not sales, are what really matter. They work hard to control their costs. They concentrate first on controlling employee costs and the cost of goods sold (COGS). This is where 50 to 75 percent of costs are in most businesses, but most owners spend more time managing their phone bill than cutting costs in these two critical areas.
Successful business owners make decisions based on documented data. They are also masters of productivity and time management. They understand that the most valuable asset in any business is the owner’s time, so they learn how to maximize it so they can work on what really matters: increasing sales and profits.
Successful business owners are always trying to come up with new business ideas. All business owners who have taken their business to the next level do the following:
They read at least one business book per month.
They subscribe to multiple general business and industry-specific publications to spot trends early and get ideas on how to improve their business.
They all have had the help of a business coach to guide them through the steps necessary for growing a successful business.
They are not afraid to take ideas from other industries. Think of Netflix who took an idea from product-of-the-month clubs and applied it to movie rentals. This idea literally destroyed the market leader, Blockbuster.
Finally, every successful business owner has a laser-like focus on taking action. They understand that successful businesses occur when the owner makes consistent improvements.
They start by making a list of their long-term business goals. Then they figure out what they have to do this year in order to reach them. What do they have to do this quarter, this month, this week, and today to reach those annual goals?
Successful business owners know that the secret to massive profits is the combination of good ideas with a laser focus on monthly action. This is the mantra you must follow. Think of how much better your company would be if you committed to working four hours per week on improving your business. Do that for 50 weeks this year, and you will have worked 200 hours on improving your business. How many of your competitors are making this kind of investment? Worse yet—what if one of your competitors does and you don’t? How far behind will you be?
So steal an idea from Nike and “Just do it!” Review this issue and our past issues and find the articles that discuss the one area you feel needs the most improvement.
The most valuable resource in every business is the business owner’s time! You can buy everything else except more hours in the day.
So what can a business owner do to “find” the time to focus on what is most important to their success and survival—increased sales and profits?
The following are the steps I recommend to every business owner I am coaching when they say they have no time for the changes they have identified as vital to their success:
I always start by having the owner track their time in detail. To do this, the owner simply writes down everything they do on a pad or a calendar for a week or two. Be sure to mark down how long every job takes.
Then the owner must decide how much an hour of their time is worth. A simple way is to decide how much they wish to make (or what they would pay to replace themselves) and divide this by 2,500. This is 50 weeks at 50 hours per week (Sorry—I don’t know a business owner who doesn’t work at least that much in a year). So if you want to take home $100,000/year, you need to make a profit of $40/hour.
Analyze your time and highlight anything that you are spending your time on that occurs on a regular basis and has no direct impact on your customer or your bottom line. Highlight items that you are doing that you wouldn’t pay someone else to do at the hourly rate you calculated in #2 above ($40/hour in our example).
Eliminate as many of the things identified in #3 as possible.
At this point, the business owner usually laughs at me and tells me, “Sounds great, but I can’t because (fill in any of the 100s of excuses you can come up with here).” My response is always the same: “If you want to be successful, you must! Otherwise, you will continue to have the same problems you are having now.”
Once you identify those items that you shouldn’t be doing, figure out how you can:
Delegate it to one of your employees
Outsource it
Eliminate it in total
This is not a one-time exercise though!
I keep a red Post-it note on the corkboard right above my computer screen that says:
How can I get someone else to do this?
This is a reminder to myself that I should only be working on those things that will directly increase sales and profits.
In this video I discuss how the basic accounting formula of Sales-Expenses=Profits is hurting your business profits.
When I took my accounting classes and passed the CPA exam (the first in 1976, the second in 1977—dang, I’ve been doing this a long time!) I learned the definition of business profit as promulgated by GAAP (Generally Accepted Accounting Principles). What I didn’t learn at that time is how trying to teach business owners to understand the GAAP principle of profit was really hurting their ability to grow a highly profitable business.
The problem is with the basic accounting formula itself:
Sales – Expenses = Profit
So what is wrong with this formula?
First, it makes the business owner concentrate on the wrong thing. As humans, we normally concentrate on the first item of any list. As business owners, we concentrate on increasing sales at all costs, and then we pay all of our expenses. Finally, whatever is left over is our profit. Most business owners wait for a CPA to tell them what the GAAP profits were after they perform their “magic” and generate a financial statement.
Second, it doesn’t force us to look at every sale and expense with an eye toward profits. Is this a sale with a high profit margin after all costs? Is this a sale that leads to profits in the future, or is this just a one-off kind of a sale that just increases related costs? Does every dollar of expense lead to increased profits?
A third problem with the GAAP formula is that human nature is to spend. The more we increase sales, the more cash we bring in. The more cash we bring in, the more money we have to spend. The more money we have to spend, the more money we actually spend. We justify all this increased spending as necessary to grow our business sales. We are only concentrating on growing the top line of sales rather than the last item of profits.
Finally, the accounting formula puts profits last and makes getting to that final number so complicated that the vast majority of business owners just pretend they understand it. What is last on a list is almost always ignored. Human behaviorists call it the primacy effect. The accounting formula puts sales first, so we concentrate on sales. It puts profits last, so we barely think about it.
What is your company profit? As accountants we calculate your GAAP profits based on many estimates. What is the value of your inventory? What is the collectability of your receivables? When should a sale be recorded? When should a payable be recorded? How do we handle customer prepayments? How and when do we record profits on large, long-term contracts? How long and what method do we use to write off equipment? Many decisions go into a CPA’s calculations of your bottom line. In truth, the GAAP formula is really just an estimate of your profit for a specific time period.
Way, way too complicated if you are trying to successfully run your business!
Your definition of business profit should be much more simplistic—how much did I increase cash this year?
That’s it! Cash is all that counts. It’s great when you have it and it sucks when you don’t! The only thing you should be focusing on is cash profits.
Three things to help you out:
Pick up Profit First by Mike Michalowicz to discover a simple system any business can implement to grow a business concentrating just on your cash balance.
Click on this link (https://profitmasters.mykajabi.com/store/esox55ut) to purchase my online course Finding the Cash Hiding in Your Business! This is a low-cost option if you are serious about quickly eliminating your business cash flow problems.
In this video I show how the owners of highly business profitable business owners use 15 minutes a week reviewing certain financial numbers to increase their sales, cash balances and profits.
How spending 15 minutes per week reviewing five reports can increase your profits tremendously.
Nothing is interesting if you’re not interested. – Helen Macinnes
About the last thing most business owners are interested in is spending some quality time with their accounting records. In fact, I often joke that all business owners have ADD. They have so many hats to wear that reviewing their books often loses out to selling their products, producing their products, delivering their products, and collecting from their customers.
But the successful business owner truly understands that accounting is the language of business, and that reviewing their accounting reports on a regular basis is a major part of increasing their business profits, sales and cash flow.
Business is NOT a game of numbers; but a game of human behavior—in particular, the business owner’s behavior. Good accounting data gives us a scorecard to measure our behavior and its effects. K.C. Truby (the Lonesome Cowboy and marketing expert) calls it the Five Minute Books. I call it the Daily Scorecard. But we both agree that it is a vital tool to achieving success.
The following are the five essential reports and how to use them:
A daily profit and loss. Review your income statement at least weekly in order to identify what is or isn’t working for you. You want to identify where you should focus your limited resources and time. Comparing results from month to month helps us identify trends and react quickly. You also want to compare your results to the industry average.
Sales reports by product or customer. Sales reports by customer with related costs and profits help us to identify our most profitable customers and products. With this report you will try to identify your best customers so that you can 1) make sure you focus on giving them excellent service and 2) look for opportunities to sell them additional products. Your best customers already know you, love you, and trust you. This makes them the easiest customers to sell additional products or services to.
Accounts receivable. The most common cause of cash flow problems is a failure to keep collections under control. A daily review prevents surprises and allows you an improved chance of collection. Simply put—the older an invoice is, the less likely you are to collect on it.
Accounts payable. Too often a business owner looks at their bank account and sees that they have enough cash to buy that new car or piece of equipment. What they don’t know is that they owe their vendors more than what they have in the bank. If business owners know how much cash they need in the next thirty days, they will more often than not find a way to meet their obligations. A daily review of your obligations will help you sleep at night, as well as plan for the timely repayment of your vendors and creditors.
Cash on Hand. Profit can be an opinion but cash is a fact. Each day you must know exactly how much you have in the bank. This one step alone will drive you toward a bigger bank account.
Highly profitable businesses are almost always run by owners who know their numbers! They value the information their accounting records provide, so they often hire an experienced CPA to help them analyze them.
The following video shows you how to set up these reports and provides you with some tips on what to look for when you are reviewing them.
(INSERT VIDEO)
Action Tips:
Decide what reports you need to review in order to discover what you need to do to improve sales, cut costs and increase profits.
Design the reports in your accounting program.
Schedule some time weekly to review this.
Hire an experienced CPA to:
Help you set up the reports.
Show you what to look for.
Seriously consider hiring an experienced CPA to review your financial reports quarterly. They will often spot trends that you won’t.
As you work on increasing your profits each month, you will start to identify many projects that need to be completed. Some will naturally belong to a certain employee; others will not. Those that do not should be assigned to a special project team.
The purpose of a special project action team is simply to improve the business. It is hard to improve your business amidst the chaos of running the day-to-day operations. Apple is a great example of the success of action-oriented teams that strive to improve business and develop new and innovative products. This is not accomplished by a mysterious spark of creative genius. They consistently make ideas happen by taking an organized approach to implementing their projects.
In this video I reveal how to correctly use special project teams to increase profits consistently.
The keys to the special project action team’s success are:
Identifying the projects that will have the most impact on the company’s success. This is obviously the owner’s job to start with. Later, as the team gets used to the idea, they will start to recommend projects themselves.
Setting aside some time weekly or monthly for the project team to meet and work. This has to be scheduled to emphasize to your team the importance you attach to the projects chosen and your dedication to completing them.
Choosing the right people to implement the project. This means those employees who can offer the most to the project. Another advantage of a team is the ability to include employees from different departments. This can help get the proper input, ideas, and skills needed to complete the project.
Implementing a system to ensure action and completion. Delegation of tasks and responsibilities with consistent follow-up meetings, timelines, and deadlines are essential for a successful special project team.
I used special project teams to great success when I was the CFO of a local Coca-Cola bottling plant. For each of the six years I was there, our special project team worked on projects that increased the company’s profit by at least the total cost of my 30+ person department. In one year alone, we worked on projects that cut production costs by over $10 million.
Even if you are a solopreneur, you can have a special project team. Do the work yourself or better yet, hire a coach to help you. Either way, I can all but guarantee that the increase in profit from having a special project team will far exceed the associated costs.
Most problems occur repeatedly for a reason. Using hot tickets helps you quickly resolve problems. You will soon discover that they also help you track problems. Once you identify recurrent problems, you can start looking for causes and finding solutions. In this video I discuss what Hot Tickets are and how to use them to eliminate customer related errors.
To develop hot tickets, first create a checklist of the most common errors you have when delivering your product. Once an error is spotted, a hot ticket is created and the problem is checked off or written in using the space provided for those unusual and original problems.
On the back of the form, the employee should document how the customer’s problem was resolved. It should also document when the customer was contacted and if the employee feels the owner should be contacting this customer.
Impress upon employees how important it is to take the time to fill out hot tickets accurately. They will help ensure that all customer problems are resolved quickly.
The tickets will also tell you what problems are recurring. Review them at the end of the week. If the same problem arises multiple times during the week, you will know that it is time to investigate the cause of the problem.
There are dozens of reasons why people make mistakes. Hot tickets help you find the root causes of your most frequent mistakes. Problems have specific causes and specific solutions. Make sure you have systems in place to track them.
(I first read about hot tickets in a book by Jay Goltz called The Street-Smart Entrepreneur. While it was published in 1998, this is still a good book that you should buy. It is available on Amazon.)
It may seem like the biggest cliché in the world, but profit is the key to your success. Explaining why profit is so important for companies is a little like explaining why your health is important.
In this video I discuss why it is essential for you to become your Profit Maximizer for your business.
It may seem like the biggest cliché in the world, but profit is the key to your success. Explaining why profit is so important for companies is a little like explaining why your health is important.
Why are profits so important? Here’s why:
Profit is the only objective measure of your company’s performance. When people use profit for scorekeeping, there’s a clear-cut way for everyone to know how well the company is doing.
Close behind profit can follow bonuses, profit sharing, and savings plan contributions.
Profit means customer needs and problems can be fully addressed. Happy customers mean repeat business and a growing company.
Profits provide the ability to weather the unexpected downturns that sooner or later strike every business.
Profit provides an ongoing source of cash, your company’s lifeblood and the fuel for future growth. Your profitability, or lack of it, will determine your company’s quality of life. When a company is profitable it has:
Happy, well-paid employees
Happy bankers and investors
Happy customers who buy more and tell their friends.
Happy owners (and family) who can afford the lifestyle that success brings.
To increase profits, your whole company must have a profit mindset. That’s the whole purpose of the bonuses, profit sharing, and 401(k) matches. They are to give your employees an incentive to help you increase profits. That’s why you need to stress profits and always reinforce the fact that your employee’s goals and the company’s goals are identical.
There are three things you must do increase your business’s profitability:
Decrease expenses
Increase margins
Increase sales
Every business should have a Profit Enhancement Officer who keeps the company focused on increasing profits. Obviously, the owner should be the prime Profit Enhancement Officer. Unfortunately, owners tend to be so busy running the company and putting out the daily fires that they seldom have the precise focus required to increase profits. This is one of the main reasons for hiring a consultant.
In this video I cover the major changes in the "Paycheck Protection Flexibility Act" designed to make it easier for PPP loan forgiveness. This bill is particularly important to business owners who received a PPP Loan but are still not able to fully open or are having problems hiring qualified employees back.
When you first start a business you are both the president and the janitor. As long as you are doing most of the work, management is easy. Once the business grows to a point where you can’t do it all by yourself anymore, having strong management skills is what separates the highly profitable from those businesses that fail or are just getting by.
Unfortunately, most business owners have little or no training or experience managing a business. I use myself as an example. I was a good CPA when I started my business, but I really had no idea how to manage a CPA firm. I had to learn on the job.
How important is this? If I had to start over in a new city tomorrow, I am convinced that I could grow my business back to this point in about five years, rather than the 23 years it has taken. This is the power of learning how to manage your business. It is also the only way to grow a successful business, which is why many business owners end up failing when their business grows. These are the common mistakes I see.
They don’t have long-term goals or a plan for reaching them. If you don’t have goals, you are just drifting. If you do have goals but no plan for how to reach them, you are only dreaming. Every year you should have set or reevaluate your goals, and every month you should have a plan for making progress towards those goals.
Not aligning your goals, strategies, and business systems with your values. Trying to sell something that is against your morals is a sure road to failure. I once passed all the tests to sell insurance and retirement products to my clients. That only lasted six months, because I couldn’t get over my feeling that I have lost my autonomy with my clients. I found myself sabotaging my sales because of this conflict with my values.
Not recognizing a new threat or opportunity. Too many businesses have failed to notice a trend and either fallen into severe financial trouble or been completely eliminated. My favorite example is Blockbuster, who failed to notice the opportunity in digital content. If they had done an annual SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) they might have been able to continue as a major player in the home entertainment market. Instead, they are fighting for their very survival. What threats or opportunities are you missing?
They don’t know how to hire good employees. A good employee is often a business’s most important asset. A bad hire can cost thousands of dollars to fix. Learning how to hire good talent is a crucial skill many business owners simply do not have.
Not keeping good employees. Once you have hired the perfect employee, you must have a system in place to direct them, monitor their work, and reward good performance.
Not having job descriptions. Without job descriptions it is impossible to have the right people in the right spots. This leads to confusion, overlap, and loss of productivity. It also leads to your employees creating their own jobs in order to fill the time.
Failing to develop leaders and managers. If you want to grow, you must have strong managers. This takes time and patience, so don’t wait until you absolutely need a manager.
Micromanaging. Too many business owners think that the only way to get the job done right is if they are involved in every single aspect of their business. This stifles employee productivity, reduces initiative, and makes it difficult to keep quality employees. Stop being a meddling taskmaster and focus on growing a profitable business.
Lack of systems and procedures. It is almost impossible to provide your customers with a consistent experience without procedures and systems. I tell my business owners they do have procedures, even if they didn’t design them. They are whatever your employees decide will be the best (or fastest!) way to finish the job. This is obviously not what you want.
Failing to manage the owner’s time. Running a business is complicated and can quickly overwhelm the owner. It is very common to get so lost in the day-to-day operations of a business that you end up ignoring the important work of growing your business.
Every time I meet with a new business owner I say the same thing. “Congratulations, and my condolences.” See, I know what a wild ride they are about to embark on.
I congratulate them because being self-employed can be both financially and emotionally rewarding. Nothing beats the feeling of satisfaction that comes from building a business from scratch that supports you, your family, your employees, and their families.
Owning a small business is the essence of the American dream. Nothing else rewards you for your hard work and ingenuity the way owning a successful small business does.
I give them my condolences because they simply don’t know what they don’t know. And what they don’t know causes them to make very common mistakes that result in lost sales, lost profits, and often the failure of their business.
The results of a business failure are devastating for the owner, the owner’s family, and the employees. Business failure is a leading cause of divorces, bankruptcy, depression, and alcohol and drug addiction, and has even led to suicide.
The sad thing is that almost all of these mistakes can be avoided simply by being aware of them. Here is a list of the most common mistakes I see small business owners make when marketing and selling their products or services.
Marketing Mistakes Small Business Owners Make
I was like most business owners when I started. I was good at my core product and thought that would be enough. My training and experience had made me a good CPA. But I had never been trained in marketing and sales. I thought if I just did a good job, the customers would show up. I call this the “Build it and they will come” model. Unfortunately, I soon found out that the big problem with this model is that you don’t know what to do if the customers don’t show up.
Not knowing how to market is the biggest reason businesses fail. Here are the biggest marketing mistakes I have made and have seen clients make over the years:
Not having a true USP. That stands for Unique Selling Proposition. Simply put: When faced with all the possible choices, including doing nothing, why should the customer buy from you? If you can’t answer this clearly and concisely, your sales will suffer.
Not spending enough time on marketing. If you are not spending at least half of your time on marketing, you are setting yourself up for failure.
Giving up control of your marketing. Without customers, you don’t have a business. You have a hobby. You can outsource and delegate basically everything, but you must keep control of your marketing. Even the most experienced marketing professional won’t care about your business as much as you do. You are just one client. No one knows as much about your business or your customers’ wants and needs as you do. Plus, your marketing must match your ethics, values, and goals, or it will fail. Get help but stay in control.
Failing to target your marketing. You can’t afford to market to everyone. Pick a niche and create an offer that will appeal to them. You are much better off being a big fish in a small pond than a small fish in a big pond fighting off the sharks.
Not identifying your ideal customers. You should be able to communicate who your perfect customers are. Knowing who those customers are helps you design advertising that attracts them.
Not knowing what problems your prospects need solving. Concentrate on the benefits of your product or service rather than its features. You should know what keeps your prospects awake at night. What do they need help with? What are they worried about? How can you solve their problems and alleviate their pain?
Being inconsistent with your marketing. A company that runs poorly-designed advertising every month will outsell well-designed ads that are only run once. Whatever advertising you choose should be committed to for at least six months.
Not selling to your current customers. Your current customers are your best source of added revenue. They already know you, like you, and (hopefully!) trust you. It makes sense to spend the majority of your marketing time and dollars selling to them. I have personally worked with clients who have increased their sales by 40 percent or more just by having a program of selling additional services and products to current customers.
Not looking for other products to meet your current customers’ needs. The hardest thing is to get the customer. Once you have a customer who trusts you, why not sell them other things they need? Wal-Mart does this by selling eye exams, health insurance, and prescription drugs. You don’t even have to start up a new business. Create an affiliate agreement with a business in another field that gives you a commission for every customer you send them.
Failing to see other prospects who could use your products or services. Is there another niche or type of prospect who can use your product but isn’t doing so now? I followed one business owner who developed a paperless system for bookkeepers and accountants. He found other professionals like lawyers, engineers, and architects with similar problems and sells to these niches as well.
Not asking for referrals. This is directly related to not selling to your current customers. Right now I do almost no traditional marketing. About 95 percent of my new customers come from referrals. A prospect from a referral is the closest thing to a sale you are likely to see.
Not providing outstanding customer service. Today customers will research you online and using social media. It is no longer enough to provide “industry standard” service. To be successful, you must provide legendary service that far exceeds what your competitors offer.
Only using one marketing channel. Your company should have a full quiver of advertising and marketing arrows. Once you find one way to attract customers, start looking for another to attract even more customers.
Not tracking and measuring marketing results. If you don’t measure your results, how do you know what is working, what should be improved, and what should be eliminated?
Not testing your new marketing before making a big buy. If you are planning on mailing out 10,000 postcards, you should test mail 500 first and make sure the results justify the cost.
Not including targeted direct mail. Direct mail still works and can be a very good way to get new customers. Today many business owners think this is too old-fashioned, and focus all of their time on web and email advertising. I have found that only about 20 percent of my customers have signed up for my email list. I would be ignoring the other 80 percent if I didn’t snail mail newsletters and offers.
Not including social media and text marketing in your plans. Many small business owners are missing out on inexpensive marketing opportunities. Every business owner needs to become proficient at social media marketing or will be left behind by savvier competitors.
Not creating an in-house list of your customers. This list is your most important asset. Build this up and you will always have the ability to sell new products and services quickly.
Forgetting to include a call to action and a deadline in all of your advertising. Always tell your customers what step they should take next. Don’t assume they will know and follow through. Tell them what you want them to do and give them a deadline. This works.
Being mediocre in the sales department. You must be able to sell. Your advertising and marketing will bring in the prospects, but you and your staff must be able to sell to them. Yes, some people are much better at this than others. But all business owners must become proficient at selling to survive.
Not knowing the lifetime value of your customers. Knowing how much your average new customer is worth helps you know how much you should spend to acquire them. Cell phone companies understand this and have built their business models around this key concept. They deeply discount the cost of a new phone knowing they will easily make up the difference with huge profits on monthly service fees.
Giving up on what’s working when times get tough. If it’s working, never stop. When times are tough, cut somewhere else. If it’s working, don’t stop, even if you are bored with it.
Passing up free publicity opportunities. Send out press releases for everything. Get to know the newspaper editors and bloggers who cover your industry. Work to become a trusted source.
Not marketing when you are busy. Too many business owners experience the “boom or bust” cycle. This is when they are busy with work and they are too busy to market. Then when they finish up, they have nothing to work on next. This is why it is important to systematize your marketing so it can run on auto-pilot even when you are swamped.
