Tag: profit

What is the best time to measure your profit?

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Every business needs to make a profit, we already know that, but when should that profit be measured?

And as for many questions, the first response is “That depends”.

It depends upon why you are measuring the profit.

Ideally, and unless you can afford to run “loss leaders’, every transaction needs to deliver a fair profit. That is a sales price that makes it worthwhile for the business to sell it, and that makes it a good deal for the person or business buying it.

A successful business also needs a longer term perspective. There are bills that only need to be paid after a longer period – rent is maybe weekly or monthly, suppliers often provide monthly accounts, utilities might only need to be paid every quarter, and some memberships or licence fees are due on an annual basis.

So your measure of profit has to take into account a longer time frame than just a single transaction. Your sales price has to cover the cost of acquiring what you sold, plus a contribution to these other costs of doing business.

That’s all probably stuff you’ve heard before, but have you heard of behavior being a measure of profit? Before exploring that, let’s take a step back and agree on something: What you do today will build the world you live in in the future. Taking it easy will not provide you with a nice house and car. Managing your money, taking control of your finances will be more likely to do so.

The point is that behavior that your market disapproves of will eventually cause the business to fail. It may survive on past glory for a while, but it needs to truly serve the needs of the market or it will eventually fail when people stop coming in to buy, and that makes a big difference to your overall profit position.

Think of it this way: if you don’t truly serve your market they will go to someone who does.

What business issues do you think other business owners would be interested in? Let me know in the comments section.

Customer Care Finance Marketing

Is there a market for me?

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That is a question that very few people ask, and it has two meanings. Both of them are important to you if you currently operate a business, or plan to.

There is truth in the saying that “You only ever sell yourself”. That is, building rapport with your client/customer is the first step to making an eventual sale. It follows that you have to be ‘saleable’. Your knowledge of your industry and product, your appearance, and your behaviors all contribute to the level of rapport you are able to build. Do you know what you are talking about, and can you explain that to your non-expert client? Are you dressed in an industry- and location-appropriate manner? Normally doctors don’t wear hi-vis clothing and work boots, whereas a building contractor probably should. (And would you trust a building contractor with a stethoscope around their neck the way you trust a doctor wearing one?)

Do you stand by your word? Does your market believe what you say? If not then you are giving them reasons to not buy from you.

Then of course there actually has to be a viable market that you can connect to and influence. That influence has to encourage them to buy from you instead of some other business, otherwise your business will slowly (or maybe not so slowly) just fade away.

What are your answers to these questions? Are you earning your market’s trust and influencing them to buy from you? And if not, why not?

There’s another question that is also important about now: Why should I care? The answer to that is relatively simple. You can build a long term, sustainable business and secure your future, or you can head for the ‘dark side’ and not always do what is best for your clients. The dark side leads to a ‘feast and famine’ cycle where you need to restart the business every so often, which eats into your profits, and eventually can cause the business to fail. The ethical approach, by comparison, maintains good relationships with the people making up your market, which maintains your profit level.

The ethical approach means that your income planning can sit on solid ground, the other way means that you always have to hope that people don’t find out your secret.

More on this topic later, and let me know you agree or not. I’m also interested in what you’d like covered in the next post.

Customer Care Entrepreneurship

Emotion – needed in Business?

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I recently watched “Pirate Radio” (AKA Boat That Rocked) again. A good fun movie that tells the story of a pirate radio  station off the coast of England in the 1960s.  If you’ve seen it you’ll notice that they all seem to be having great fun, and that made me think about being in business – and having fun.

Many people will tell you to keep emotion out of your business.  They are nearly right.

emotionThere is a serious side, and that is to deliver the quality and quantity that your client’s expect, and to require an appropriate reward for that. Keep good records and measure what is going on inside your business.

The thing is though that you must be as passionate about your business as the Pirate Radio guys were about theirs. Being in business can mean long hours, at least to start with, and it can mean being away from home for extended periods, and all sorts of lifestyle concessions, so if you don’t enjoy it then it will feel like really hard work.

And you can’t hide that from your clients! You have probably experienced being served in an off-hand way, and decided not to do business with that store again? Your clients are just as good at figuring out if you care about your business, and if you don’t care about your business then they figure you probably don’t care about them.

If you are passionate about what you do for a living your clients will know, and that will rub off on them! There will be a mysterious ‘X’ factor about your business that competitors will not be able to mimic.

Another way to look at it is: you are likely to be earning a living for a long time, it might as well be doing something you like! If not it will seem like a very long time indeed.

Customer Care Marketing Networking What You Need To Control Your Team

Profitable thoughts

A business owner or manager must have an extensive business education, and be able to apply that education at a moment’s notice. Being in business without knowing what you’re doing is most likely to be an expensive pastime. Having an education without applying it is an indulgence.

Most mentors, managers and advisers will give you plenty of knowledge that they have gained over their career, and some will tell you what you could have or should have done in given situations. We’re different, we want to tell you what to do before you need to do it, and tell you in a way that is easy to bring to mind.

We want you to be able to bring the lesson to mind during the time when you need to apply it, after all that’s the point of knowing something – to be able to employ it.

There are many ways to ‘anchor’ thoughts in your mind so that they can reappear when you most need them, and we will use several in this site. Some we will explain, others we will just employ to best effect. The end result is that you will learn what you need to know and be able to employ it just when you need it.

One technique we use is to use words starting with ‘P’. Yes, other people have done this, but we have more words than the others, and we imbed them in your mind more effectively than they do. The way we do it you will be able to bring the concepts to mind any and every time you need them.

In previous articles we have already mentioned profit as an important word, and one that is important to your business. If you haven’t read our entry on that please take a moment to read it now.

From that article you will know that a potential client’s problem is important, so is your promise and your proof. Get them right and you will reduce your need to compete on price. Notice all the words starting with ‘P’? Make a mind map that connects these concepts in a way that makes sense to you, and that will make them even easier to recall.

Look for articles in future that take either a concept (like Publicity) or a subject (such as Performance) and provide you with a concise, easy to recall story that will be useful every time you need it in future.

We told you about the ‘P’ device to make things easier to recall, to bring back to mind. Did you notice the other techniques that are also employed here? It doesn’t matter (though we’d be happy to get your feedback) if you didn’t consciously notice them, they are there and they work. You’ll become aware – if you aren’t already – when you hear someone use a trigger word and your think “What was that ‘P’ word again”?”

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Your most important message to Customers

The other kind of person that is important to your business is your customer. Without customers, you have no business. So let’s spend some time thinking about them.

First up, be aware that they do not share your priorities. They are looking for things like value for money, good service, and quality goods. This is important for a many reasons, perhaps the most important one is: they have the money and the choice of where to spend it. It is that choice that makes their priorities the most important priorities for your business.

You see, if you can tap into those priorities, if you can demonstrate that you too consider these things to be most important then the customer is more likely to buy from you.

So how do you do that? It starts by talking to the customer in a language that they understand. Here are some ideas for your next promotion.

What potential clients understand best is: they have a problem and they are looking for a solution. Their problem may be that they need a new product, or they need a service. For example they need a new appliance, some food, a new car or they need a plumber, a doctor or an accountant. Have you noticed when you are looking for something you need that your senses go into overdrive? You become aware of the slightest indication that someone might have a solution? You are immediately focused on what the other person is talking about? Your customers are the same.

That means that at the beginning of every sales conversation you must tell them about their Problem. Take a sentence or two to tell them about the problems of cooking with a broken appliance, the challenge of getting the kids to school in an unreliable car, or the problems that might happen if their tax were to be prepared by an ineffective accountant.

Let’s explore that a little – have you ever made a purchase because something was unusual, or unique only to find that you discover half a dozen of the same thing on the way home? Those people didn’t just buy the same thing today, you were simply unaware of them until now. This is explained in the article about your RAS.

If you have identified your market correctly, and you are speaking their language then they will be listening – just like you were when your RAS drew your attention to those things on the way home. Human Beings are designed to filter out the clutter and focus on what is important to them – this is also why you hear your name said in a normal tine, even if it is the other side of a crowded room. By describing their problem in their language you will have their undivided attention, and they will want to know the rest of your story.

The next step is to make them your Promise. “I can fix that”. Tell them, again in a sentence or two, about how you can solve their problem. If you have correctly identified their problem, described it in language they understand and now made this promise attractive and believable, they will be keen to read the rest of your promotional piece. And that’s just what you want them to do! The first goal your advertising pieces must achieve is make the potential customer want to know the rest of your story.

Some marketers create long, repetitive and boring adverts, and settle for the reader scanning to the bottom and filling in the enquiry form at the end. That is a person who wants to try. You want the person to want to buy. This process achieves that.

You already know the first two steps: describe their problem in words they understand, and make a compelling promise. The first is designed to produce the response “You got that right!” and the second produces “If that’s true, I want some of that”.

The third step is where you tell your story. Not a made up tale, this is the Proof that you can do what you claimed. The first two sections can be quite short. This section may be as long as it takes to tell your story. However, it will only work if it is succinct, interesting to read (or listen to, or watch depending upon the technology you used), keeps moving and has no unnecessary repetition.

The fourth step is to introduce the price in such a way that it represents great value for money and doing business with you is as easy as can be. Then you include your ‘call to action’. That can be your order form, it can be your information request, it is whatever you had in mind as the outcome when you sat down to create the campaign.

If you have done your work correctly, you have someone who knows that you share their pain, is keen to listen to what you are saying, has accepted your proof, believes that your price offers good value for money, and has found that taking the next step is really easy. And that means your profits just went up.

Can you see that by concentrating on the client and their needs you have automatically generated a profit? By combining the best people in the right roles inside your business and looking at things from your customer’s perspective you have made your business good to do business with? That means that you have taken a step away from competing on price, and that’s good for your profit margin.

Customer Care Marketing Networking Online Business Social Networking Sites What You Need To Control

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