Category: Small Business

Throw me a Rope!!

Throw me a Rope!!

Guys, this blog post is going to be a little different as I talk about an experience I had this weekend at the golf course. For fun, I work as a marshall at a local golf course to TRY (man do I try) and keep the pace of play at an acceptable 4 hours. Anyway, I saw a guy that I hadn’t seen in a while come to the tee box where I was sitting and this is the conversation we had.

I was speaking with a gentleman at the golf course this weekend. It went a little something like this:
Me: Hey man! I haven’t seen you in a while. How’s things? Handshake and “bro” hug.

Golfer: Man, to be honest, I’m struggling a little. I came out here to get my mind off of things for just a few hours.

Me: Aw man, so what’s going on?

Golfer: I’m upside down in my business. I need to make some sales to pay my bills, to pay my mortgage, and car payment…Heck to even make payroll. I have so many people dependent on me and I am failing them. Hell, we won’t even have any food after next week.

Me: Dude, I’m so sorry. TImes have been tough lately for a lot of people. What do you do and how long have you had your business?

Golfer: I do xyz and I’ve been in business for over 20 years.

Me: What made you start a business like that?

Golfer: To be honest, I wanted freedom.
– Freedom…to spend more time with my family
..to celebrate anniversaries, birthdays, A’s on report cards, winning goal of a soccer game
…to work the schedule I want to work
…To run my business the way I see fit and avoid all of the drama I had in previous jobs
…To not work tirelessly and endlessly to make money to put in someone else’s pocket
…I was tired of living paycheck to paycheck. To build a nest egg for retirement. To afford some luxuries and enjoyment every once in a while.…To not work tirelessly and endlessly to make money to put in someone else’s pocket
…I wanted to build a nest egg for retirement. To afford some luxuries and enjoyment every once in a while.…To not work tirelessly and endlessly to make money to put in someone else’s pocket
…Boy, that’s all gone now.

Me: Wow, I get it. So what’s going on?

Golfer: It’s been good for a long time, then something changed. I’m not quite sure what happened. My product and service rival all of my competitors, and most would agree that it is better. I work every day on marketing, social media, advertising, calling prospects, working with my team to be sure that we execute to the highest level possible. But my business is slowly fading into darkness.
– I feel alone, I can’t talk to anyone about my struggles because I don’t want to be perceived as a failure.
– I am short, and often mean, to my friends family, and employees from all of the stress my business situation has put me in.
– The weight of the world is on my shoulders and I don’t know how much longer I can carry it.
– And don’t EVEN get me started on how hard this pandemic has hit me.
– I have even looked for regular jobs that I could do to get some money in.
– IT JUST SEEMS LIKE THE HARDER I WORK THE WORSE IT GETS!

Me: Well, if I may…I’m in a business where my goal is to help business owners like you. You see, often, when we get into crisis mode, we run to where we are most comfortable. We focus on doing things that bring us the most joy in our business because we don’t have much of that anymore and we’ll try anything to make the work environment more comfortable. The problem with that is usually, that’s the last place you need to be. You have to be able to stop, look at your business in it’s entirety, and determine where you can bring the most value, the value that ONLY you can bring, and make sure everyone else is doing the things they need to be doing. I know this sounds cliche, but you have to spend the time working ON your business not IN it.

Me: Look, I’ve got some ideas that we can take a look at, we may just need to pivot, re-establish some points that may have gotten lost, not sure. Why don’t we take 45 minutes and talk. I’ll give you some ideas on how we can get you back in the right position, get some clients, and get some immediate cash flow. If you like what you hear, we can get to work on implementing it. And you can do that with me or without me. You only need to include me if you feel like you need me, but you’ll be more than welcome to take the information and do it yourself.

Golfer:  Dude, that would be cool. But I just told you I don’t have any money. I can’t afford to pay anybody, anything right now.

Me: Hey man, the 45 minute conversation is on me. I just want to see if I can help. It won’t cost you a dime, just 45 minutes of your time. Let’s see if we can find you some clients, quickly.

Golfer: I don’t know, man. I’ve been doing this a long time. It may just be time for me to move on to something else.

Me: Look, you had a hiccup. It probably started a while ago and you just felt it was a little setback and didn’t make a big deal out of it. Now it’s a big deal because it’s bigger than you thought it was. Now, you’re desperate because you can’t pay your people or your bills. Based on your WHY, don’t you think you owe it to yourself, your family, and your employees to at least give it one shot. 45 minutes… we’ll either have a solution or we’ll think of something else.

Golfer: Thank you, but I don’t need some kind of coach. I know my business. I know what I’m doing. It’s just not working out.

Me: Ok, since we’re on the golf course, Tiger Woods had as many as 9 coaches in his career. That didn’t mean he wasn’t good at golf. He just needed someone, usually someone who was not as good as he was, but was good at seeing opportunities for improvement and helping him get better. Looking at his game from different perspectives to help him reach status of best in the world. It didn’t mean he was bad at what he did, they just helped him be better than everyone else. Let’s setup a call and worst-case scenario, we can move on, and I’ll see you next time your out here. But the best case…We get you some clients, get you some cash flow, and get you back in the game.

We agreed and setup a call. Guys, we can’t be ashamed to seek help every once in a while. I know in today’s world of marketing we have every “guru” on the planet wanting to take your money. Many of them don’t care what it does to your financial perspective. They only care about making the sale and taking the money from you. That has turned us all, me included, into skeptics. We’re tired of wasting our time, money, and energy dealing with people that make big promises, only to take your money and run. Well, fortunately, that’s not all of us. Some of us genuinely have knowledge, skill, and the desire to help. These other guys just make it harder for the good guys to get noticed. Ever seen the movie Hitch, just like that. He helps good guys get out of their own way so they can be successful and in the end, it was almost like he didn’t do anything but help them have the confidence to be who they were. Hehe, it’s funny, I had actually planned on my next blog post being F#ck Marketing, talking about all of this stuff. But this happened yesterday and I decided to post about it.

I appreciate you listening to my rambling, but if this is you in any way, schedule a call. It costs you nothing but a few minute4s of your time and when it’s over, I hope to have brought you some value. We can walk away friends, acquaintances, or you can forget you even know me. My goal is simply to bring you value. And hey, if you like what you hear and think I can help you more, just ask. I am sure we can work something out.

Don’t forget to download my book, it’s FREE!  www.decalogicsolutions.com

And if you need to talk: www.talk2bronson.com

OR….If you want to get the same value, but you don’t want to talk to anyone (I would highly advise against that), i do have a full eLearning Course online that you can do that covers all of the same concepts. Check it out: www.decalogicsoluitionsacademy.com

Markup vs Margin

If you are a business that sells products, or a business that invests more than just time in the delivery of their services, then this question should be a big deal for you. As the owner, you want to earn as much profit margin as possible, yet still remain competitive in your space. What I have recently discovered is that many businesses don’t truly understand the different in Markup vs Margin, how they are calculated, and what does this mean for your profits?

Before I get into the explanation, there are a few key terms related to this topic that you must understand in order to truly grasp the overall concept.

Revenue is the income you earn by selling your goods or services. It is the top line of your income statement and reflects earnings before deductions. How you PRICE your products contributes to this number. If you sell 10 widgets for $10 each, your revenue is $100.

Cost of Goods Sold (COGS) is the expenses incurred during the making, procurement of, and delivery of your products or services. It will include expenses like materials, direct labor costs, and contractors.

Gross Profit is the revenue left over after you pay your COGS expenses. Gross Profit is Revenue – COGS

The Problem

I see many business owners that are taking a product that costs them $10 to produce, and say well I want to have a 35% profit, so I will sell it for 13.50. There, I have set a 35% profit margin on this product, right?  WRONG!! Unfortunately, that price does NOT result in a 35% profit margin, that is simply a 35% markup.

I am not saying that the calculation is incorrect, the calculation is fine IF you desire to see what your markup is. If you want to get to your margin, or profit margin, you would need a different calculation. Profit Margin is not a direct reflection of your pricing. Instead, it is a calculation that provides your rate of return on the sale of your products and services. To calculate margin, you start with your Gross Profit (Revenue – COGS), then divide that number by revenue.

Margin

For example, in the problem statement I provide above, if you sell one widget at $13,50, and a cost of $10.00, then you make $3.50 gross profit on that widget. To find the margin, we take the gross profit ($3.50) and divide by the revenue ($13.50) and that give us 25.93% margin. You get to keep 25.93% of what you bring in (not counting overhead, fixed costs, etc). That’s a little way off from the 35% profit margin that we wanted.

If you know your cost and want to price to get a 35% profit margin, you would take your COGS and divide that by 1 – profit margin. In this example, the formula would be:

10.00. / (1 – .35) = 15.39

So to make 35% profit on a $10.00 COGS, you would need to price the product at $15.39

Markup

Markup represents how much more your selling price is than the amount the item costs you (COGS). It does not represent how much money you get to keep as profit.

To find the markup in the example above, you sell your item for $13.50 and it costs you $10.00. First find the gross profit:

$13.50 – $10.00 = $3.50

To find out what percentage the cost was marked up, divide the gross profit by the COGS.

$3.50 / $10.00 = 0.35 markup or 35%

That simply means you sold the widget for 35% more than it cost you to make it. But at that price, you are only making 25.93% profit.

Here is a little table that I created that shows the margin that each markup will produce.

When you find that your profits aren’t working out where they should be, check your pricing first. Often, your COGS, or cost to produce the item, have increased and your pricing doesn’t account for that. Bottom line is you are taking a direct hit to your bottom line, your salary, on the increase in COGS. Also be positive that you are truly factoring all of the costs (labor, purchase price, fees, shipping, etc) associated with selling the product in your COGS calculation?

In our next installment, we’ll discuss why discounting is not the bright star you think it is!

Cheers!

Kick Start Your Marketing

Today I’d like to teach you about the three most important start up marketing tools you need to get and keep new customers.

  1. In person: It’s essential you meet with customers/clients in person whenever possible. This shows you respect them and take the time to work with your clients to give personal attention to each of them.
  2. Follow up letter: Always take a moment to send a follow up letter about what you talked about, new agreements or partnerships made and to thank them for taking the time to meet with you. Likewise, you should always send thank you letters or small gifts to partners you find success with.
  3. Phone call: Use a telephone call to follow up with them to talk again about the matters you talked about in your meeting and offer any assistance you can to help their business run smoothly and more successfully.

None of these will work if you don’t have a quality product/service to back you up!

Here are the key steps for putting together your start-up marketing tools:

  1. Research potential customers, buyers, competitors and their preferred methods of distribution.
  2. Talk to potential customers. Take a hard look at your product from a customer’s perspective and see what it needs to be successful.
  3. Follow up with your 3-step process from above.
  4. Develop systems for contact follow through, quality control standards and customer service.
  5. Develop post-sale follow up system to keep lines of communication open is customers and build on your current relationship which increases future purchases.

“Marketing and innovation produce results; all the rest are costs” Peter Drucker, management consultant

Here’s another one I love from an icon:

“If there is any one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as from your own.” Henry Ford, Founder of Ford Motor Company

This lesson has offered you the tools to put together a start-up marketing plan that can be used over and over again to help your customer base and business grow in a manageable way.

Stop Wasting Your Resources!

Today you’re going to learn how to find a target market of potential customers so you aren’t wasting precious resources on blitz marketing. So, the two questions you have to ask yourself are:
  • What do people really want to buy from me?
  • What related products are they already buying?
Once you figure this out you will know who is more predisposed to purchase your products/services. Then, you find other businesses with the same customer base who you can customer share with. Come up with an incentive and great arrangement to encourage both of your customer bases to shop at both of your stores. The basic concept is this: You want to find existing businesses who have the customer profile that you are looking for to market your products/services to. Then strike up a relationship with those business owners to work out an incentive for customers to purchase from both businesses. As a result, you have an audience to market to and they generate an added value from their current base. So, how do you figure this out? There is a great formula from Jay Abraham you can follow with great success. LV = (P x F) x N – MC Here’s what it all means:
  • LV is the life time value of a customer
  • P is the average profit margin from each sale
  • F is the number of times a customer buys each year
  • N is the number of years customers stay with you
  • MC is the marketing cost per customer (total costs/number of customers)
Once you know how much you need to spend to attract a new customer, you will know how much of an incentive you can offer to a business to help attract new customers. So, here’s your step-by-step process:
  1. Find companies who already have the customer base you are looking for.
  2. Negotiate an incentive for them to share that customer base with you.
  3. Focus your marketing resources to this group of predisposed customers.
If you need help working through this process, please contact us and we’ll set you up with the most comprehensive system of marketing tools and resources.

Educate Your Customers

Educate them about what, you may be thinking. Well, consider this, many businesses focus solely on attracting new customers, but you NEED to spend a good chunk of your time retaining current and former customers. These are people you already know to be a good sales potential…they’ve already bought from you!

Take the time to market and sell new products to your old customers and less time trying to sell old products to new customers and you will see a drastic change in your sales, customer quality and branding position.

Here are a couple of key elements to use to retain your current customers:

  1. Stay in contact: This means by phone, email, e-newsletter, in person-by pigeon if you have too!
  2. Post-Purchase Assurance: This means you need to follow up with customers. Your customers need to feel like they are being supported for their purchase and with the item they purchased. How many times have you purchased a product, then felt completely abandoned? Something as simple as a Thank You note with your contact or customer service information can go along way in retaining a great customer.
  3. Deals & Guarantees: Always offer your current customers the best deals and guarantees you have. Show them you appreciate their business or even come up with a club specifically to reward loyal customers. You can also do this with a preferred pricing option.
  4. Integrity: Using good business practices and simply upholding integrity, dignity and honesty go along way with customers. Let’s face it, there’s a lot of swindling and crap out there and the safer and more confident you make your customers feel, the more they will trust you and that makes for an amazingly supportive and loyal customer.

There are three cornerstone ideas to a successful business:

  • Quality product/service
  • Offering useful products/services that solve a problem for or enhance the life of a customer
  • Offer subjects your customers find interesting

Use this approach of educating your customers and offering them real information and insight and you will be rewarded with loyalty and success.

Stop wasting all your time on new prospects while your current customers fall by the wayside!

As Jay Abraham says, “Your best prospects are your existing customers. If you’ve been putting all your marketing efforts into acquiring new customers, stop and diverts some of your resources into reselling, upselling, cross-selling to those same customers. In every ways possible – through package inserts, regular mailings, special offers – stay in touch with those customers and get them used to buying from you.”

So, there it is! Remember, we can help you put together the resources and tools to do exactly that. We can help you educate your customers and you can watch the benefits pay offer many-fold.

Lessons I Learned from Paris Hilton

Today we’ll talk about shameless self-promotion. That’s right, I said it! Shameless! After all, we are learning from Paris Hilton here.

It’s all about self-promotion! Self-promotion comes in many forms and you can use different tactics to get your name out there. Look at politicians! Talk about self-promotion and in some not so discreet ways, at that. But, seriously, consider some of the major superstars we all know. Madonna, Donald Trump, Howard Stern and Bill Clinton, just to name a few.

We all self promote. Did you raise your hand in class to show the teacher you knew the answer? Of course! That’s self-promotion. This is the kind of self-promotion we are talking about. With dignity, class and the knowledge to back it up. If you self-promote only to prove you don’t really know what you’re talking about, you’re going to lose business.

Natural self-promoters are the former and I want to tell you about the three major traits they have and use to build themselves and their businesses.

  1. The first is position. You need to position yourself around people who can make a difference in your life. You need to do this frequently. You need to wake up every morning and ask yourself “Who can I meet today who will make a difference in my success?” In fact, go a step further, write it in big, bold letters and tape it on your bathroom mirror.

Also consider:

Who can help me meet my goals?

Is it a prospective customer/client? A colleague with contacts? An association with key members who may become prospects?

Don’t settle into interacting with the people who are the easiest to access. You need to reach outside your comfort zone and there you will find a wealth of new connections that will bring you great success.

  1. Now, let’s talk about Style. No, this doesn’t mean you need an Armani suit to bring in more business (though, let’s be honest-it wouldn’t hurt) ☺ What this really means is how are you different from your competitors and others in your industry. What makes you memorable with customers?

If you are meeting a lot of people and they don’t remember you once you leave the room, you have a serious problem! This means you have an opportunity to present yourself in a more memorable way.

There are lots of little subtle changes you can make. Reassess your:

  • Business cards
  • Company message
  • Your picture
  • Your wording

Maybe even, your hairstyle (of course, now we’re back to the expensive suit, but it really works!)

You get the idea. There are lots of little ways you can work on making your image and business more successful. Also, consider how you sound on the phone and how you great people at meetings or other events. Think about your 30-sec elevator speech.

  1. The third trait of natural promoters is repetition. You can’t say it once and leave it at that. Successful self-promoters say it as many times as they need until they get a response. Would you remember a commercial for Coca-Cola if you only saw it once, no! You see it over and over and eventually you head out to the store.

You, also, have to make multiple impressions on those you are networking with in order to build brand awareness. Repetition is in direct connection with positioning. Once you find people to network with, reach out and find hundreds more who can help in your success as well.