Monday, November 29, 2010

Profit Makers and Breakers: 10 Things Every Business Owner Should Know

In my career, I've seen many businesses make good and bad decisions.

I was just talking with my husband yesterday and we were discussing one company that mad a monumentally bad decision that may have not directly affected revenues, but it affected employee morale and team dynamic ... which indirectly affected their bottom line, as employees started to resign.

Looking at various scenarios - whether it's for companies I worked for, or clients I consulted, or when launching my own firm - my decades of real-world experienced combined with an MBA, helps me look at business decisions in a different light and analyze them from different vantage points.

Here are some profit makers and profit breakers for most ALL businesses: large, small, start-up or staple. See if any apply to your company!

Profit Breaker #1. Keeping the 'Corporate Cancer' On Board. Ok, you know the person, the one who may appear to be a high performer, but also has a high level of being insubordinate, outspoken, defensive, and has blatant disrespect for their peers. They respond to most every management decision with hesitation and resistance. They don't work well with others and often is alone in their cube or office 'looking' busy. C-Level management is aware of his or her bad reputation with team members and fellow coworkers, but turns a blind eye, as they're not the ones in the trenches with this individual ...they don't realize the true disruption this person is making to the team and hence is ok with them staying on board because this person seems to be 'a work horse'.

Solution: Cut the 'dead weight'. This person has to go and the sooner the better. It's similar to a 'corporate cancer' which will only spread and affect other areas of the business entity. It needs to be removed with expedience. It may be difficult to carry this out, and you may get some push back from the higher ups. But if you present the '3 R's' (Reasons, Remedy attempts, and Reoccurrence of bad behavior over a specific time period) human resources will see the light and support your decision. Before you actually fire this person, make sure all your ducks are in a row and you've detailed specific moments of their disruptive behavior and your attempts to work with them on correcting it. Of course, working with them will never be a solution because of the innate characteristics these types of people typically have: strong-willed and defensive. So termination is really inevitable. You have to look at it this way, what management message are you sending to the team by keeping someone on board that behaves so badly without any repercussions? Once you remove this person, a huge weight will be lifted from the team and you'll almost immediately see a change for the better with the employee morale and production turnout. You will find a better version of this person without the attitude.

Profit Maker #2. Leverage Content: Develop A Free Report, EZine, eAlert or eBulletin. No matter what business you're in, you need a strong, sure fire way to bring in leads (prospects). Creating free content is a great way to give something and get something in return. You're writing about something you are passionate about ... you're area of expertise. You're offering free, powerful editorial content. And in return, you're asking for an email address from the reader. Creating this type of content isn't just good for acquisition efforts, it's also good for branding and establishing you as an expert within your niche. You can then leverage your free content to build your list (prospect database). Your list is your key to future sales. Growing and cultivating your list through editorial is a proven business model from top online publishers. It's a great way to bond with ... and cross-sell to ... your readers. And this helps create a loyal following, a community if you will, of like-minded followers. From there, the sky is the limit!

Profit Breaker #3. Limited Products or Services. No matter what you're selling, whether it's products or a service (i.e. copywriting, freelancing, consulting) you should always have a variety of price points for customers at every level. Offering front-end products and back-end products gives you room to bring in a customer at a low level and up-sell them. Having only one pricing model or product/service excludes people by interest level and price threshold.

Solution: Think about your target audience and different ways you can serve them. Pick a high, middle and low pricing structure to capture sales at all levels. Then, create products/services that fall into each of the pricing categories. Try not to turn away any reasonable business. Of course, you'll always get the person who wants it all for practically pennies. But losing them is no real loss, as they were probably not a serious prospect anyway.

Profit Maker #4. Market Smarter, Not Harder with SONAR. There are many 'creatively strategic' ways to increase visibility, traffic, sales, leads and buzz. Leverage internet marketing for its speed, reach and cost efficiency as well as look at 'old school' marketing for your local efforts like classified ads, flyers and bulletin boards. Don't be afraid to seek guidance from a professional. Check out my SONAR Content Distribution Model TM for some great, proven, and easy ways to market your company for practically nothing!

Profit Breaker #5. Being Penny Wise and Pound Foolish. It's wise to be cognizant of your finances, but don't make decisions that may save a few bucks now, but will cost you growth and returns down the road. I know one business owner that let the marketing department go - the team that would help bring in new business and create ways to retain current clients - but kept non-revenue generating positions such as several web programmers. When what they should have done was downsize marketing keeping at least one or two people, but also downsize the web team and other areas of the company that weren't profit centers, such as accounting or human resources.

Solution: Have vision and foresight. Realize that it's ok to take calculated risks. When reviewing your numbers, evaluate if the reward is greater than the risk ... and the odds of reaching the reward are stacked in your favor. Look at the big picture and allocate funds and resources accordingly. Also, have a realistic timeline for growth, prospect acquisition and customer conversion. It's not a seller's market anymore. The economy is tough and consumers are watching every nickel they earn and spend, therefore conversion time may be longer than a few years ago. Bonding with your prospects and customers right now is crucial for sustainable profits.

Profit Maker #6. Mix and Mingle. Networking and relationship cultivation are extremely important whether you're an entrepreneur or work for a corporation. Creating a contact list of people that can be influential or beneficial to your business is always a good thing. Take time to go to industry events when possible and attend the social functions. This is where people loosen up and deals are made. Don't be the guy or gal in your room checking emails. Get out there and build relationships. Today's cocktail buddy may be tomorrow's business partner.

Profit Breaker #7: Not Doing Competitive Research Or Market Surveillance. Whether you're a start-up business or seasoned company, it's always advantageous to keep abreast of your competitors. This will help you devise creative and strategic ways to either break into new markets or expand in your existing market. It will also help you with product development, marketing, pricing strategies, and customer service.

Solution: If you're a start-up company, I highly recommend that you research the market you're considering and the audience you want to target BEFORE you launch your business. If you're an existing business, I recommend doing market research at least once per year to make sure you're a leader and not a laggard within your niche. Clearly define what will make your product stand out ... your "USP" (unique selling proposition) ... in the marketplace. Understand your target audience and how to create messages and products that will resonate with them. Don't try and guess what your prospects are thinking. Infiltrate relevant forums. Do keyword research. Find out exactly what your target audience wants. This will ultimately save you time and money down the road with marketing and product development efforts.

Profit Maker #8: Pursue Joint Ventures and Affiliate Marketing Opportunities. Many clients I work with always push affiliate marketing aside as an afterthought effort. Big mistake. Having a carefully thought out affiliate marketing plan in place as soon as possible is a great way to bring in revenues fast. Don't have any products yet? Not a problem. You're mission is to find out other affiliate marketers that have products that you actually believe in and sell them to your list (subscribers, customers, clients). By selling someone else's relevant products to your list you (A) have an instant product line with no overhead and (B) can start creating cash flow without necessarily having your own products developed yet. One caveat is that if you're selling someone else's products, make sure that they don't conflict with a product that you 'may' be thinking about creating for your own list. Because if you do, it will be harder for your own list to make the transition to your product, if they already have product loyalty to your affiliate. So be strategic when thinking about affiliate products to sell to your list. Pick out products that compliment, but are not potentially competitive.

Profit Breaker #9: Not Listening To The Experts! I always tell my clients, heck, I even have verbiage in my consulting proposals that reads, "Full cooperation and support from Client regarding marketing recommendations and/or strategies, swiftness in response to market demand, and a streamlined approval process is needed for best results."

As a consultant, I can't help a client's business if they don't listen to me and implement my recommendations. If your employee or consultant gives you their expert opinion, and you don't listen, then don't wonder why you're not getting optimum results. I hear this all the time from marketing professionals and freelancers. The boss feels that since they're 'footing the bill' they call the shots ... even the decisions that the boss has no expertise in. (Although, some bosses truly believe they excel at most everything and try to do it all!). They just can't seem to let go of the reigns and trust the employee or consultant to do their job. But keep one thing in mind: Every decision has a consequence.

Solution: Bosses, business owners, managers -- be open minded and let go. Sometimes you need to believe in, trust, put your ego aside, and listen to the experts. You know, the people YOU hired with the proven experience, performance, and track record coming out of their wazoo. I know it's hard for you to hand over the controls, but it is critical for ultimate success. You have to believe in the person you hired and their years of experience. If you've done your 'due diligence' before you hired them, then you should take comfort in knowing you've hired the right, capable person to lead your business to greatness. If you don't listen to the expert, then you must be accountable - for better or worse - for 'going rogue'.

Profit Maker #10: Embrace Online Marketing. Online marketing is a quick, cost-effective way to expand your reach and market share. Its immediacy, broach reach, and ability to target specific customers is second to none as far as marketing channels. And there's so many tactics to choose from: online PR, email marketing, banner ads, text ads, search engine marketing, social media marketing, viral marketing ... and the list goes on. If you have a business where you have been sticking to offline tactics such as direct mail, print ads, or even grass roots marketing, then I urge you to test some low-to-no cost online marketing tactics. Put your toe in the water. You may not think Internet marketing is applicable for your particular business or target audience, but you just have to think outside the box. I always say, if you're a creative and strategic thinker, you can whip up some really interesting ways to leverage this channel for profits.
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