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Profit is the Winning Score in Business

December 5, 2011

Can you imagine watching the World Series without a scoreboard, or Dancing with the Stars without judges’ scorecards?  Either the events would become boring, or too random, or just plain would not work.  Same goes for your business, especially if you want to win!  Because how will you know if you are winning without scoring?

So then, what is the score in business?  Answer:  Money, and more specifically, PROFIT.  Profit is the winning score: the more profit, the bigger the winner. Some business owners keep their eye only on the money coming in, but that’s not the whole story.  You have to keep tabs on your spending to make sure you bring in a profit.  And, to recap, profit is AFTER all expenses including your pay and business taxes.  Even if you profit $1, you are winning. 

Why is profit so important?  It represents sustainability.  Your business can create a future, it can look itself in the mirror and say “You won in the game you created, now what’s next?”  Profitability gives you a future to grow into. 

Suggestions:  Take a look at your books.  It’s November 2010.  What is the score? Are you winning or losing?  If you are losing, what can you put into place immediately to turn the tide.  Remember, it’s not over ‘til the fat lady sings!

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Communication Styles

November 25, 2011

Have you ever left a sales presentation (or any meeting for that matter), wondering what went wrong? You thought you were on the same page, but by the end you were on Venus and she was on…Rutabaga? You planned for the meeting, arrived on time, were courteous, you had a great idea, so why did things go south, so very, very south?

Could be you have diabolically opposite styles of communication. While you are focusing on all the statistical detail of the features of your product, your decision maker’s eyes might be glazing over, long past listening to your presentation. It would be much better if you spoke about the big picture, or maybe how the product would impact the group (the team, the company, etc), or maybe how much more enjoyable work would be if she purchased your product.

To sort out this dilemma, there are a couple of things to look at: 1. What are the different styles, 2. What kind of style do I have, 3. What kind of style do they have and 4. How can I tell what their style is in advance of the meeting?

There are four distinct Styles of Communication:
Director–Likes the bottom line, big picture, quick paced
Presenter–He’s a player, usually in sales, entertainer and story teller. Live of the party type
Mediator–Consensus builder, slower paced, makes sure everyone gets a say.
Strategist–She’s detail focused, slower paced and looks for evidence.

Review the above styles and identify your preferred style of communication. Now, review your past experience with the person you will be meeting. Here are some questions to ask yourself: How is their pace? Are they big picture focused, always talking about the vision or the future? Are they entertaining, like to talk, tell stories? Or, are they detail orientated, love statistics, follow the rules to the letter?

Do the best you can to create your presentation with THEM and with their style in mind.

Even if you don’t hit it on the nail, you will be miles ahead of your past presentations, because you will be designing them with your decision maker in mind. You will not only deliver what they want but how they like it to be delivered!! Those of you who are strategists and directors (the hard headed of the four styles), try to use your opposite style for a day. You just might find you can be flexible (something that is usually hard for you to do) with others in order to make the sale or get others to agree with you.

I will be speaking in more detail about communication styles and how you can close– bring in more deals, and have more productivity in meetings.  Let me know if you are interested.

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Figuring out the financial viability of your business, Part II

November 2, 2011

Earlier I wrote about using a business model to figure out what you want financially from your business using a massage therapist as an example. In this post I will use a contractor as an example. Jim, contractor for 5 years, wants to make $100,000.00 in one year. The question is, how much revenue does he need to collect to make that number?
Let’s figure out the average job: $30,000.00. Subs are about $12,000. Business Expenses (truck, phone, office, utilities, admin/sales, marketing) are about $8,000. What remains is $10,000. This contractor will need 10 jobs in one year at $30,000 a job to make $100,000.00. He needs to make $300,000 Gross Sales, about one job of $30,000 per month. Why am I slicing it in a few ways, but really repeating myself? Because many entrepreneurs do not get it. They get a big job, are very focused on the delivery of the job, and are shocked when all that money is gone. Jim could cut the staff, but how does the business run while he is managing the crew, bidding on proposals, and being the face of the business? It is important to weigh expenses and the value those services are to the business. I recommend that marketing is the last line item expense to cut. Marketing is the life blood of your business. By an ongoing campaign to market your business, you will not hit the financial valleys as often. However regarding cutting expenses, even those you do not want to cut, sometimes you have to do what you have to do. Without a doubt, you must continuously look at the money of your business: what comes in and what goes out.

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Figuring out the financial viability of your business

October 28, 2011

Sometimes we just jump in.  We have a vision, well, maybe not even a vision, maybe it’s not that fancy.  Maybe we have a thought, yes, a thought to be a business owner.  We think we have a product or service that our potential clients would need and would buy from us. We put out the proverbial “Open for Business” sign (create, market, sell), provide the produce or service and we start making money.   Yet often, somewhere down the road, sometimes in the 3rd month of business, sometimes in the 3rd year, we discover the profits our company generates are sadly not enough.

Read the rest of this entry »

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Work on your Strengths for a Better Return on Investment

October 24, 2011

Statistics indicate you are better off working on your strengths than working on your weaknesses. Investing in, practicing on, your strong suit is statistically a better ROI.. Tiger Woods works 90% of his time on the long shot (his strength) and 10% on the short shot (not his strength).  He should have probably spent some time working on his marriage, but that’s another post.  The point is:  he is a master golfer with many, many championships to his credit, and he works overwhelmingly on this strengths.

Take it on –
In your selling process, choose a strength and weakness. Perhaps you are excellent at establishing rapport and relationship, but are not so good at the closing stage.  All the schools of thought are: you must be a strong closer. Well, yes, asking for the order is important, but it’s not everything! I’ve known some masterful sales people who rarely asked for that order, but who could charm the birds out of the trees, and they didn’t need a smooth closing. To be clear, I am not advocating to abandon working on your weak areas, but rather, spend more time working on your strengths, you’ll feel more confident and have more fun because you are perfecting what you are already good at. 

My friends at the world renowned Gallup Group agree, and one of their #1 New York Times Bestselling Authors, Tom Rath, has written a book called Strengths Finder 2.0.  You can take their quick online assessment and identify your strengths.  Then get to work on improving your natural talents!  A good tip is to support people in what they are good at and if you do, chances are you will find yourself in a more positive, growth environment.

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“Working” is the operative word in Networking

August 5, 2011

I live in Los Angeles and there are over 5,000 networking events every week here.  Truthfully, I just made that number up, but there are a lot of events, week in and week out.  Over the 16 years I have been a business owner, I have made my way though many of these –weekdays,  weeknights , weekends,  all women, all chamber, Young Professionals, Over 50, West LA, Orange County, Rotarian, Largest Mixer.   Speed Networking, 30 second commercials, coffees…you name it, I’ve probably done it.  I thought it was time I weighed in.

Does networking work?  That depends on what you are looking for.  Remember when your mom said you have to kiss a lot of frogs?  Your mom might not have said that, but you know the expression.  Well, it applies to networking.  Lots of frog kissing is required until you find a match.  It takes time and money to weed out the ones that don’t work if you take the “large net” theory.  If you can focus in, you are better off.  Here are some questions to ask yourself to narrow the field:

1.  What do I want out of networking?  Clients?  Referral Partners? Vendors?  Comaraderie?  Connection?

2. Where do these folks hang out?

3.  Go there, and stay there so people get to know you  (not a question, sorry)

I wanted to find new clients, find good vendors, get out of the office, have fun and connect.  This is what I have narrowed it down to for my networking needs:  LeTip–a once a week, no competition organization that acts as my sales force, and LeTip is full of my potential clients.   A women’s group–Women’s Business Connection–a once a month gathering in a local restaurant, lots of mingling, 30 sec commercials.  Chamber:  LAX and West LA- a couple times a month.   I get 80% of my business from LeTip; 15% from the chambers, and I am connected to the business community and have a great vendor pool; and I get some business from the women’s group and a lot of love.  I have fun at all of these events. 

Given there are so many possible networking events every day, night, week and month, make your choice wisely based on what you are looking for and eventually you will find a great match.

Let me know your feelings.  If you want more information about the organizations I belong to, give me a call at 310-910-0766.

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Don’t Give Away the Store

July 7, 2011

 

 

How many of us have needed a great employee to boost sales, fulfillment or operations, and saw the only way to get them on board was to offer them a piece of the business?

Most of the time it turns ugly, ask Mark Zuckerberg about Eduardo Saverin.  Here are some tips on avoiding the cash drain or the “I’ll see you in court” disgruntled employee.

Instead of a piece of the business–

 Remember to 1. Put the agreement in writing (have an attorney look at it–$200 in fees will save you in the long run), and 2.  Have a time limit.  Without a doubt, things change, your employee agreements are no exception.

Finally, remember who is the creator of the company, who takes all the risks, and who is usually the one to turn out the lights.  You should protect her (or him).