Business Problems: Dealing With Serious Issues

business problems - waiting for the crashI had a rough winter.  One that was only two years after my last rough winter.  And it has not gotten much better since.  Sure, we are getting by, but do not have enough business to get ahead.  We are still much better off than others in our same situation.  I am speaking of my consulting business.  By March/April, I have always been very busy, not this year.  Should I lay down and die, just be depressed, or is there another option?  There must be good ways to deal with business problems.

It is easy to do.  Wallow in self pity.  Be depressed about your situation.  But it is certainly not constructive.  Spending your time worrying about what is going to happen will not do anybody any good.  Instead, problem solve your situation.

So how do you problem solve your situation?

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It Is A Business, Something Must Be Sold

Wicker Park Sushi

Wicker Park Sushi at O’hare airport

How can you ever say that you have a business opportunity with no selling involved?  Try this example: You subscribe to Directv.  You introduce Directv to a friend and he gets $100 for joining and you get $100.  Introduce 10 friends a month to Directv and you will make $1000 per month.  Did you sell anything?

Technically you did.  You sold Directv service to your friends, letting them know that they get $100 for subscribing.  Maybe you also told them you get $100, maybe not.  But it did not feel like selling did it?  You are giving them a great deal, they can take it or leave it, no problem either way.

What you are not doing is cold calling people, continually pushing stuff they do not want, or knocking on doors.  All those bad images you get when you think about selling.  You are also not bugging your friends over and over to join a company that they do not want to join.  You are asking once, and letting them know the benefit if they do.

Sponsoring people can be done in a nice, laid back format similar to asking your friend if he or she would like to subscribe to Directv for $100.  You offer a program to get a discount on high-quality products, or perhaps you are a little more focused and say they get 25% off high quality kitchen items like vanilla, black pepper, and cinnamon for joining.  And it only costs $39.95.  Let them know they will love the products and it is possible that their parents or grandparents also used the products.  Many people, in fact, drive miles to buy them.

So what is being sold so far?  You are making an offer for your friend to join a program or club to receive a discount on great products.  I guess you are selling the membership by being honest and telling them the features and benefits of joining.  It is fine if they say no, just ask for other people who might be interested.  You could ask if they know other people who like to cook, for instance.  Then repeat the process.

At this point nothing has been sold, at least nothing that will make you money.  The products still must be purchased.  Now you want to promote the idea of buying the products with the people you have signed up, but no heavy pressure.  Some will buy, some will not.  It is okay either way.

I do not know if I make this sound easy or not, but while it is work, it is very straight forward.  Can you get rich selling household products?  Let me ask you a question: Can you get rich selling computers?  Can you get rich selling ice cream?  Can you get rich selling beer?  The answer to all: If you sell enough.  And generally, you do not do it alone.  You need a team, people to help.  And for some of the people who just signed up as discount customers, it  might just be them.

I would call it a sales business, yes.  But no selling ice to Eskimos or distasteful selling.  Just promoting your business, your products, and your opportunity.  And of course the discount.

Seasonality In Business

When you think of seasonality, you might think of hunting or fishing season.  Maybe you think of the seasons of the year such as Summer, Winter, Fall, and Spring.  Or maybe you think of seasons of life.  But business also has seasons and there are two kinds.  One kind of season has to do with the business cycle when you have boom times and bust times, or growth and recession.  The best time to start a business is at the end of a recession as the economy is starting to grow again, because weaker businesses tend to vanish during recession and because there has been pent up demand that is starting to be released.

The other kind of seasonality in business has to do with yearly cycles in sales.  For instance, winter coats sell best as winter is starting to set in.  Winter coats don’t sell well in the heat of summer.  Most retail products have selling seasons with the most common being the Christmas selling season.  That is the pinnacle of all seasons with people buying gifts for others, and most products are impacted by gift giving.  There are exceptions to this rule so you must really know your product and perhaps gather data over a couple years to really know for sure when it sells the best.

Why is it important to know when your product sells best?  Advertising for a product outside of a selling season is like trying to run against the wind.  You might move a bit but you are going to have to put in a lot of effort, resources, money, etc. to get it done.  Now if you are selling during the product’s busy season, it’ll be like running with the wind, you will find it much less effort to sell.  So your advertising dollars are best spent during or just before the product’s busy season.

Another reason that knowing the product’s busy season is important is that you will be impacting your customer service if you run out of the product at the right time, so you may need to stock more during the product’s busy season than during the off season.  One of my clients doesn’t have the warehouse space to keep a full stock of all items so they use seasonality to stock the right items at the right time and only use the warehouse space needed.

Do you find it really really difficult to sell your product and you are thinking about giving up?  See if your product has a season and make sure it is the right time of year for your product.  You may also want to check the economic climate and see if that might have an impact on your product sales.  We find that we get flooded with orders for our gourmet baking goods line towards the end of the year but orders trickle in during the rest of the year.  If we gave up when things were slow, we might miss out on the end of year sales.  By contrast, many people try to lose weight or start a business after the first of the year, when they make their new year’s resolutions.  If you are selling a weight loss product or business opportunity, you might want to see how you do early in the year.

Do you notice any interesting seasonalities with your product?

References:

What Is A Business Opportunity?

To a seeker, a business opportunity is a way to make money.  To a company offering an opportunity, it is a chance to leverage somebody else’s time, talent, or money to grow the business.  Often opportunities are “sold” as having a specific income or potential income, but the risk and reward belong to the seeker as an independent business person.  In other words, the success or failure of a business opportunity is ultimately up to the seeker, regardless of how much help the offering company gives.

A business opportunity typically isn’t employment because employment does not have a major risk or the potential reward of operating a business.  You can hire an employee to run a business subsidiary but you monitor it to make sure it’s operating properly and will have to decide to close it if it cannot turn a profit.  A business opportunity, on the other hand, is at the sole discretion of the independent business person.

A company offering a business opportunity has very little risk if the independent business person is not successful but gets a major reward if they are.  As a seeker, a company is not just going to hand you money with nothing expected in return.  You will have to perform.  You may have very little direction, you will just be expected to create sales however you do it.  In return you may get a brand to use or some other benefit from the company, but they aren’t just going to dole out a bunch of money.

A get rich quick scheme is a way for a seeker to make money quickly.  Actually, it’s a scheme because there’s no such thing as “get rich quick”.  It’s usually a guise to get you to part with your money for very little in return.  A valid business would be an investment of time and or money for a return.  That return may be 30% or more, but it will still take a while to become profitable.  Often businesses can be profitable right away if you don’t count the time you invest.  It might also be possible to earn a profit right away if the independent business person has an uncommon talent or skill.  But generally you’re not going to be profitable right away and it will take hard work.

Most people who join a multi-level marketing company sell business opportunities.  Often this is all they sell, except for the product they sell themselves.  Selling a business opportunity is technically recruiting, which requires a somewhat different skill set.  Still, it is so similar to selling that I personally would not tell people that there is “no selling involved”.  I mean, when you are in business you sell something to someone, that’s what a business is.  If you recruit, product must still be moved in order to make a profit, and the better you can sell yourself, your customer, and your downline on the product, the more money you’ll make.

Often the pitch “no selling involved” is used to refer to distasteful selling, such as door-to-door sales or cold telephone calling.  Using these methods are typically not effective, so I would not do or encourage distasteful selling techniques.  Advertising can be very effective to build a business if done properly and is usually a much more fun way to reach people.  Those you talk to are already interested before they call so you typically don’t encounter harsh rejection.

If you do get involved with a business opportunity, make sure you know what will be required of you and what you will get from the company you’re going into business with.  Make sure you get it spelled out in writing.

Generating Activity

If you are new to business, the first thing you need to know is that you can’t sell anything.  You can’t.  Approach your mom with a new product to sell her and she’s going to be skeptical.  So how do you sell if you can’t sell?  I mean because, come on, you can’t start a business and sell nothing right?  Actually, you can start a business and sell nothing as long as eventually you will sell and have a profit.  Take facebook and twitter for example.  No initial product, no advertising platform, but they were definitely “for profit” businesses that made zero sales and zero profits.  Their initial goal was to create traffic for their websites by providing value to their users.  Users are not customers because they don’t buy anything, they just use their services for free.  From the traffic, or eye balls, eventually facebook and twitter started using paid advertisements to generate income.  Don’t think either one is profitable yet though.

Similarly to facebook and twitter, your initial goal when you start a business is to generate activity.  What this may mean is that you give yourself (time), your materials, your samples, or your products away for free or at cost (no profit) until you generate some interest.  Our big break this week came from a free stuff site that we got listed on, where we offered to give away free samples with a catalog request.  This generated tons of interest and, truth be told, we are selling almost no product.  But we will get our materials in front of people who will hopefully end up buying.  Not all of them, but some of them will.

I know what you’re saying… “I can’t afford to give away so much without selling!”  I tell you what, you really won’t sell until you give away something.  People are just too skeptical of sales offers, they need something to dream with or to try.  And they need a pressure-free environment in which to make a decision.  If you keep bugging people they will never buy, because they will feel too much pressure.  So the best thing to do is to give them sales literature and samples, and let them get back to you with an order.  Eventually you’ll probably want to follow up, and you may want to ask for the order, but you want to try to do all of this without pressure.

Your best customers will ultimately buy from you because you give freely of yourself to them.  You are not there to sell to them as much as you are to help them through the process.  If you are the guy or girl they can go to and are satisfied with your service, price will not be an issue.  So make sure to always serve your customer to the best of your ability.

So you want to generate activity by giving of yourself and your materials, but of course you need to budget for this.  Realizing that your budget is too small for what you need to do is important, but not always because you need to fit your expenses within your budget.  More often, you need to expand your budget by coming up with money from investors or from the bank.  This is when you really need to sell, and you need to get your facts straight.  Most of the time, investors want to know what kind of return they will get.  How do you know what the return will be if you aren’t selling?  Guess like crazy.  Use your imagination to figure out what your business ultimately looks like and communicate that to potential investors.

A good problem to have is too much activity, and probably not enough sales.  Be ready for it!

What Can You Do With Marketing?

Marketing is a soft discipline so many small business owners don’t understand what it is and how it can benefit them. Other areas of business are more understandable: Sales and customer service, for instance, have tasks that you can easily identify and implement. Marketing isn’t quite so strait forward and it is not always so easy to come up with the answers you want. For instance: How can we make the sales process more effective? I could sit here and give you a few answers but it really depends on the customer. You have to truly understand your customer and their needs and desires in order to provide them a solution that makes sense.

Research and strategy is what marketing is really all about. We research to find out if our market is growing or shrinking, if there are niches that make sense to pursue, if our customer fits into a certain income bracket, how the customer is best reached, and so forth. We can also do marketing research to make our accounts receivable and customer service functions more effective, as certain kinds of customers are more responsive to certain actions. So marketing really can define the activities of the whole company, and mostly should, because the customer should be the focus of every department.

Once we know enough about our customer, we can create strategies and define business processes to mold to our customers’ needs. For instance, we may find that selling kitchen mixers is a declining marketing, but selling high-end mixers is a growing market with a higher profit margin. Our company may be seen by the market as selling cheaper products so we can create a new division to sell premium housewares to the high end market. Everything about the new division should appeal to this segment. We can create business processes within the new division to cater to the particular customer: where we advertise, how we sell the product, what kind of warranty is provided, and how customer service is handled.

Marketing really is the software that defines the hardware that is our business. Marketing is not sales, operations, or customer service but marketing can help all areas of the business be more effective for the particular customer group. If you have specific questions please feel free to reply and I will do my best to answer.

How To Be An Entrepreneur

If you want to be an Entrepreneur, you have to be ready to fail. Failure is part of what you go through a lot. It’s like when you’re dating. You date person after person looking for that perfect match, but you’re going to have failed relationships until you find it. And oh, by the way, even the perfect match may be destined for a failure… but we try not to think that way.

As an Entrepreneur we are looking for opportunities to make money. Can’t find any opportunities you say? Hundreds pass by you every day, you just have to be tuned in to be looking for them. So be on the lookout. You could read business magazines or books to help you get tuned in. Just make sure you make yourself aware.

The problem then becomes choosing the right opportunity, because once you choose you will find 10 more that may work even better. You could be methodical in choosing which one to pursue, by evaluating the market and surveying potential customers. It is probably a good idea to do this, but sometimes the best opportunities look a little weird in the beginning, then develop into great products or services.

Take the leap and select an opportunity, which I will assume is a product or service but it may also include methods of marketing or a new way of doing an old business. Ultimately though you are selling something, so spend a little time and or money to attempt to sell your product or service, and get feedback from potential customers. Make little changes based on the feedback you get and try again. Ultimately you will find out if your product is worth continuing with. Perhaps it’s not… then it’s time to move on to a different opportunity.

You may go through several different opportunities, or perhaps you will start and fail at several businesses, before you find the magical combination that creates winning growth. Keep at it because you will get there. Just remember that you only need one success and if you try and fail enough, you will try and succeed at least once.

One important thing to keep in mind: Because you will need to be able to fail, you don’t want to bet the farm on your opportunity.  You always want to have a fall back in case things get bad.  Then you will be able to build up some money and try again.  If your failure leaves you flat broke it will be very difficult to start again right away.

Pickin Up – Poetry Saturday

I’m so happy with my little guy
But when he plays do the toys fly
He’s finally getting to be old enough
I can point my finger to the pile of stuff

And he’s picking up, pickin up
The toys go into the box again
Till the next time and I point to them
And he’s pickin up

Last week Thursday garbage day I thought
So I put the junk out on the curb but not
The boxes had to be broken down and tied
And another week went by

Before they were pickin up, pickin up
I guess I got to understand the rules
Spend the time to do it right you fool
So they get picked up

Last year was a horrible year for business
I thought they would repossess my kids
But this week I got a wonderful surprise
Sold some work and right before my eyes

It’s pickin up, pickin up
I guess the economy gets better no fear
You have to wonder after the destruction last year
Now it’s pickin up

Marketing 101 For Small Businesses

Marketing is not simply the act of selling the product to a customer but is the definition and backbone of the total effort of the company.  Marketing defines the attributes of the customer and how the customer will be reached so that time and money are not wasted.  Marketing looks for the value added of the company that can be sold to the customer.  Marketing outlines the business flow of customers through various areas of the business.  Marketing can help determine the vision and direction of the company.

Good marketing is the difference between being miserable and disheartened, and being energized with a lot of activity.  You are selling to the right people who want to hear your message.  People are making their way through the marketing process, hearing the sales presentation, buying product or signing up as distributors.  Poor marketing practice is like cold-calling the phone book.  It’s beating your head against a brick wall and never getting anywhere.  If you are a new multi-level marketer, you have probably felt this way many times.

So how do you market well?  You need to find the right types of people for your product or opportunity.  Are you selling widgets?  Who uses widgets?  Do men or women usually buy widgets?  Are widgets purchased by everyone or just certain income levels?  Are people more likely to buy widgets in a certain part of the country or world?  Are office workers more likely to buy widgets than blue collar workers?  These are the kinds of questions you need to ask about your product in order to build a profile of your customer.

For a business opportunity that sells widgets, you probably want your customer for widgets plus a few other elements.  For instance, are store owners likely to want to sell widgets?  Are widgets best sold by personal sales people?  Does being a distributor for widgets offer a discount for purchases?  These questions can define which of your customers you may want to offer the opportunity to, or the kind of people you want to find for your opportunity.

The attributes of your potential customer or distributor is their demographic profile.  Demographics are subsets of the general population.  A given person usually fits within a group or several groups.  Perhaps your demographic profile describes only 10% of the population so 90% of the population typically would not be interested in what you are offering.  If you make your offer to the correct 10% of the population, not all will buy but they are considerably more likely to be interested.  This makes business fun, to be presenting to people who want to be presented to.

Marketing also defines your advertising methods, sales messages, and what values your business offers to your customers.  Marketing as a whole may be a process of trial and error, but once you find what works for you, you just do it over and over and bigger and bigger.  Larger companies try to get more precise with their marketing activities by doing a ton of research before ever delivering a product to market, but since we don’t have a major amount of resources or time, doing things small in a trial and error fashion works fine.

How To Create More Demand

You have a winning product and you have a great sales presentation, why are orders only trickling in? It could be many different factors, and you will have to consider each one and possibly experiment a bit before you come up with the right answer:

1. Your expectations are out of whack

Perhaps you have good sales and you are just looking to get rich overnight. Let’s say you spend $100 on advertising and get $20 in orders. That’s not bad. Hopefully the orders you’ve received are from customers who will buy from you again.

2. People like the product but they like another vendor

Maybe your sales presentation needs a little bit more about why people should buy from you. Why should they buy from you and not somebody else? Just because you gave the sales presentation doesn’t mean you’ll get the sale.

3. People don’t understand your product

Perhaps either people don’t understand why they should buy the product or why they should buy this product when other comparable products sell for less. A little salesmanship could overcome this problem by going into more detail about the product’s features and benefits, and why the customer will be happier with this product.

4. The price really is too high

Generally as the price of your product goes down, demand should go up. You should not be selling for a loss but maybe a minor adjustment could change things. A little research is in order to figure out what people are willing to pay.

5. You aren’t selling your services

Many services add much value to a product. For instance, if you offer a long guarantee or you engrave the item. Perhaps you deliver the product to the person’s door the same day ordered. Make sure to offer free services that cost you little, or save you money.

6. You haven’t considered customer retention

Often initial orders are great but follow up orders are poor. How is the customer being treated? Are you meeting their expectations? Is the product falling short? Make sure to follow up with customers who order and ask them if there is anything you could do better.

I mentioned services that save you money. We found that many of our efforts to improve our customers’ experiences were worth spending a little more money for and saved us money compared to other distributors who did not do these things. For instance, we offered a six month money-back guarantee where other distributors offered 30 days. We found that more of our customers were successful with the product and we had significantly fewer returns.

We also had a policy of going above and beyond for our customers, and doing our best to eliminate the hassles of doing business with us. We found that people appreciated the effort so much that they would only buy from us, we had very few complaints, and almost nobody took advantage of our good nature. In fact, we only ever had 2 credit card charge backs because we would usually be able to work things out with our customers. I had mentioned that we used to bill customers who would send payment. We had so few customers not pay us that we saved money versus customers who used credit cards. I would also call customers who didn’t pay just to ask them if everything was ok. I ended up writing off 2 of the accounts but we generated a lot of word-of-mouth advertising.

Chris and I used to have meetings to discuss “the right thing to do” when we had an issue with a customer. This led to better customer service policies and more happy customers.

Hopefully you can come up with other ideas to improve customer retention and pump up your sales.

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